Journey from 580 to 850...final stretch. Question about Auto Loan ending

[olehammer]

Hi All - I couldn't be more grateful to this community as I've been on a journey since late 2016 to restore my previous poor credit management to purchase a home in 2018.  I'm now finding myself waking up to a FICO8 of 834 which has made 850 a potential reality.  Knowing that everything needs to rock solid to make it happen I have a quick scenario I'm looking for feedback on.  My biggest concern is what is expected to happen when my car note closes out and the only installment I will have on the report is my mortgage.

1) Oldest Account: 11.7 years   AAoA:  5.5 years  Inquiries: 1 (Sept 2021)

2) 2017 Car note coming to an end with final installment due on June 24.

3) May 2018 30yr Mortgate with a current utilization at 92%.

4) No other active installment/consumer credit loans outside of revolving credit cards

4) Familiar with having just one credit card reporting a small balance to optimize revolving credit score portion

Question 1: Do I need to have an installment loan at low utilization outside of my mortage to have a chance at 850? (to offset the ending Auto note)
Question 2: If not, any other tips for the last push?  Does that last inquiry need to drop off?

Thanks for all of your feedback!

[RobynJ]

I am not 100% positive but from what I read the mortgage should keep from loss of points after the auto closes. Either way I just wanted to say omgoooooood what an excellent journey you're on. It's posts like this that drives myself and I would venture to say many others on here to follow and prosper like you have. So thank you for giving all of us hope for a greater tomorrow. 

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@olehammer wrote:

Hi All - I couldn't be more grateful to this community as I've been on a journey since late 2016 to restore my previous poor credit management to purchase a home in 2018.  I'm now finding myself waking up to a FICO8 of 834 which has made 850 a potential reality.  Knowing that everything needs to rock solid to make it happen I have a quick scenario I'm looking for feedback on.  My biggest concern is what is expected to happen when my car note closes out and the only installment I will have on the report is my mortgage.

1) Oldest Account: 11.7 years   AAoA:  5.5 years  Inquiries: 1 (Sept 2021)

2) 2017 Car note coming to an end with final installment due on June 24.

3) May 2018 30yr Mortgate with a current utilization at 92%.

4) No other active installment/consumer credit loans outside of revolving credit cards

4) Familiar with having just one credit card reporting a small balance to optimize revolving credit score portion

Question 1: Do I need to have an installment loan at low utilization outside of my mortage to have a chance at 850? (to offset the ending Auto note)
Question 2: If not, any other tips for the last push?  Does that last inquiry need to drop off?

Thanks for all of your feedback!

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[NRB525]

Congrats on your awesome progress rebuilding. 

[CH-7-Mission-Accomplished]

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@olehammer wrote:

Hi All - I couldn't be more grateful to this community as I've been on a journey since late 2016 to restore my previous poor credit management to purchase a home in 2018.  I'm now finding myself waking up to a FICO8 of 834 which has made 850 a potential reality.  Knowing that everything needs to rock solid to make it happen I have a quick scenario I'm looking for feedback on.  My biggest concern is what is expected to happen when my car note closes out and the only installment I will have on the report is my mortgage.

1) Oldest Account: 11.7 years   AAoA:  5.5 years  Inquiries: 1 (Sept 2021)

2) 2017 Car note coming to an end with final installment due on June 24.

3) May 2018 30yr Mortgate with a current utilization at 92%.

4) No other active installment/consumer credit loans outside of revolving credit cards

4) Familiar with having just one credit card reporting a small balance to optimize revolving credit score portion

Question 1: Do I need to have an installment loan at low utilization outside of my mortage to have a chance at 850? (to offset the ending Auto note)
Question 2: If not, any other tips for the last push?  Does that last inquiry need to drop off?

Thanks for all of your feedback!

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Honestly, I wouldn't worry about getting another installment loan (in addition to your mortgage loan) just to try to quickly juice a few more FICO points to hit 850.    

I manage my family finances and I have maintained my SO's FICO 8's at perfect 850s for at least the past year (maybe two, I forget) and he only has a mortgage for an installment loan.   The original mortgage balance was $496,000 (opened 12/2016).   The current balance is $443,093, so it is paid down to 89.3% of the original balance and thus paid down by 10.7%

He had an auto loan opened 2/2016 and paid off 8/2019.   

EX FICO 8 on 7/31/2019 was 801 (Auto loan balance $100)

EX FICO 8 on 8/31/2019 was 794 (Auto loan paid to 0 and closed)

(So total loss of EX FICO 8 points for having no installment loan besides mortgage was 7 points.)

EX FICO 8 on 2/3/2020 hit perfect 850 for the first time, so about 5 months after the auto loan payoff

I'm glad I saved all of our FICO reports going back on 08/2013 when I filed BK 7.

The scores hit perfect 850s 

People seem to experience anything from no loss of points when they pay off their only installment besides the mortgage, while others experience a 30 point drop (they may not have a mortgage so maybe no installment loan at all, I can't remember the examples.)

Regardless, I would not take out a new installment loan and pay interest just for bragging rights.   Anything over 800 and you are golden with plenty of room to avail yourself of lucrative sign-up bonuses, etc.

I did apply for mu SO to get an AMEX platinum to get a 150K bonus and even with perfect 850 scores on all three bureaus (they pulled EX) they turned him down for having "too many closed accounts," which is just crazy.   He's only got like 16.   I have around 30-35 closed accounts.

[SouthJamaica]

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@olehammer wrote:

Hi All - I couldn't be more grateful to this community as I've been on a journey since late 2016 to restore my previous poor credit management to purchase a home in 2018.  I'm now finding myself waking up to a FICO8 of 834 which has made 850 a potential reality.  Knowing that everything needs to rock solid to make it happen I have a quick scenario I'm looking for feedback on.  My biggest concern is what is expected to happen when my car note closes out and the only installment I will have on the report is my mortgage.

1) Oldest Account: 11.7 years   AAoA:  5.5 years  Inquiries: 1 (Sept 2021)

2) 2017 Car note coming to an end with final installment due on June 24.

3) May 2018 30yr Mortgate with a current utilization at 92%.

4) No other active installment/consumer credit loans outside of revolving credit cards

4) Familiar with having just one credit card reporting a small balance to optimize revolving credit score portion

Question 1: Do I need to have an installment loan at low utilization outside of my mortage to have a chance at 850? (to offset the ending Auto note)
Question 2: If not, any other tips for the last push?  Does that last inquiry need to drop off?

Thanks for all of your feedback!

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Nothing negative.  Possible slight uptick from removing one account with a balance.

[olehammer]

Great perspective! Thanks for sharing your experience.

[olehammer]

Thanks! I’ll post back here once the loan is marked as fully paid off and I’m at AZEO.

[SouthJamaica]

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@olehammer wrote:
Thanks! I’ll post back here once the loan is marked as fully paid off and I’m at AZEO.

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AZEO probably won't make much of a difference, if any, in FICO 8's and 9's. It has more potential to be helpful with the mortgage scores.

[800scoreplease]

I was in the same situation recently, my only accounts with balances were a mortgage, one student loan account and one revolving account. Paid the student loan off and lost 11 to 12 points on all bureaus. That was March of this year and now I only have the mortgage (still owe I think 96%) and one credit card under 1% my highest Fico 9 is 848.

I think you can reach 850.