Lack of Mortgage and 850 score Data points

[Anonymous]

My wife and I are currently preparing for a mortgage loan on our new house set to close in December.  As part of that process, we have gotten our reports/scores as clean as possible based on advice from these forums etc.  In my research, I noted there were not a lot of data points out there on mortgage loans or lack thereof and impact to your scores.   Well as of today, my EQ FICO 8 and EX FICO 8 scores both hit 850.  Transunion FICO 8 is stuck waiting on a balance update, so curious to see what that does.  

My main point here though is that we sold our prior house and the mortgage loan reported as closed/$0.  We do have 2 other auto installment loans, both not under the 9% threshold.  Thought that was an interesting data point with no open mortgage and achieving 850 scores.  Overall utilization is around 1-2% on revolving cards, about $120k total credit limit.  Curious to see what the mortgage scores look like on my next available 3B report.  Thanks to the forums for all of the tips and tricks.

[Anonymous]

As I'm sure you know, credit limits don't impact your score.  1-2% utilization on $1000 in total limits is going to yield the same score everything else being equal as someone with 1-2% utilization on $100,000 in total limits.

I don't believe that anyone ever said that a mortgage present is necessary for an 850 score any more than another type of installment loan.  The fact that you have open installment loans definitely helps [you achieving 850] over not having any open at all.  I too am at 850 on 2 out of 3 bureaus on my FICO 8 scores and it's with a mortgage open at ~70% utilization and no other open installment loans.  I would say our profiles are probably about equal with respect to "credit mix" and probably wouldn't be more than a few points different based on that factor if it was at all easy to attempt to quantify.

[SouthJamaica]

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@Anonymous wrote:

My wife and I are currently preparing for a mortgage loan on our new house set to close in December.  As part of that process, we have gotten our reports/scores as clean as possible based on advice from these forums etc.  In my research, I noted there were not a lot of data points out there on mortgage loans or lack thereof and impact to your scores.   Well as of today, my EQ FICO 8 and EX FICO 8 scores both hit 850.  Transunion FICO 8 is stuck waiting on a balance update, so curious to see what that does.  

My main point here though is that we sold our prior house and the mortgage loan reported as closed/$0.  We do have 2 other auto installment loans, both not under the 9% threshold.  Thought that was an interesting data point with no open mortgage and achieving 850 scores.  Overall utilization is around 1-2% on revolving cards, about $120k total credit limit.  Curious to see what the mortgage scores look like on my next available 3B report.  Thanks to the forums for all of the tips and tricks.

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I agree that it is interesting. Especially the fact that your installment utilization is greater than 9%, meaning you're not completely optimized, and yet you're at 850 in FICO 8. This suggests that you have some strong buffer.

I'd already come to the conclusion that you don't need a mortgage to get 850, so long as you have sub-9% open installment loan utilization, but now I see you don't even need that.

I wonder how this is all playing out in your mortgage scores.

[Anonymous]

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@SouthJamaica wrote:

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@Anonymous wrote:

My wife and I are currently preparing for a mortgage loan on our new house set to close in December.  As part of that process, we have gotten our reports/scores as clean as possible based on advice from these forums etc.  In my research, I noted there were not a lot of data points out there on mortgage loans or lack thereof and impact to your scores.   Well as of today, my EQ FICO 8 and EX FICO 8 scores both hit 850.  Transunion FICO 8 is stuck waiting on a balance update, so curious to see what that does.  

My main point here though is that we sold our prior house and the mortgage loan reported as closed/$0.  We do have 2 other auto installment loans, both not under the 9% threshold.  Thought that was an interesting data point with no open mortgage and achieving 850 scores.  Overall utilization is around 1-2% on revolving cards, about $120k total credit limit.  Curious to see what the mortgage scores look like on my next available 3B report.  Thanks to the forums for all of the tips and tricks.

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I agree that it is interesting. Especially the fact that your installment utilization is greater than 9%, meaning you're not completely optimized, and yet you're at 850 in FICO 8. This suggests that you have some strong buffer.

I'd already come to the conclusion that you don't need a mortgage to get 850, so long as you have sub-9% open installment loan utilization, but now I see you don't even need that.

I wonder how this is all playing out in your mortgage scores.

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Thanks for the input, appreciate it. 

Yeah I read about the sub 9% installment loan utilization and we are definitely not at that.  One auto is at 72% util and the other around 44% util.  Further data points on my profile, oldest account is over 19 years and youngest is about 20 months.  Only 1 inquiry in the past 12 months and that was the mortgage pre-qual HP.    As a note, my Transunion FICO 8 just updated today to 850 as well, so trifecta of 850.   I can pull my new 3B next week, so definitely curious to see what the mortgage scores look like.  

[Anonymous]

OP, what do your age of accounts factors look like?

I'm assuming your AoOA is > 17 years, AAoA is > 7.5 years and that your AoYA is > 12 months (possibly 24 months)?

[Anonymous]

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@Anonymous wrote:

OP, what do your age of accounts factors look like?

I'm assuming your AoOA is > 17 years, AAoA is > 7.5 years and that your AoYA is > 12 months (possibly 24 months)?

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Yes to AoOA and AoYA but not sure on AAoA.  That one I'd have to look , but yes that probably is about right.  The AoYA is about 20 months or so.

[Thomas_Thumb]

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@Anonymous wrote:

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@SouthJamaica wrote:

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@Anonymous wrote:

My wife and I are currently preparing for a mortgage loan on our new house set to close in December.  As part of that process, we have gotten our reports/scores as clean as possible based on advice from these forums etc.  In my research, I noted there were not a lot of data points out there on mortgage loans or lack thereof and impact to your scores.   Well as of today, my EQ FICO 8 and EX FICO 8 scores both hit 850.  Transunion FICO 8 is stuck waiting on a balance update, so curious to see what that does.  

My main point here though is that we sold our prior house and the mortgage loan reported as closed/$0.  We do have 2 other auto installment loans, both not under the 9% threshold.  Thought that was an interesting data point with no open mortgage and achieving 850 scores.  Overall utilization is around 1-2% on revolving cards, about $120k total credit limit.  Curious to see what the mortgage scores look like on my next available 3B report.  Thanks to the forums for all of the tips and tricks.

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I agree that it is interesting. Especially the fact that your installment utilization is greater than 9%, meaning you're not completely optimized, and yet you're at 850 in FICO 8. This suggests that you have some strong buffer.

I'd already come to the conclusion that you don't need a mortgage to get 850, so long as you have sub-9% open installment loan utilization, but now I see you don't even need that.

I wonder how this is all playing out in your mortgage scores.

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Thanks for the input, appreciate it. 

Yeah I read about the sub 9% installment loan utilization and we are definitely not at that.  One auto is at 72% util and the other around 44% util.  Further data points on my profile, oldest account is over 19 years and youngest is about 20 months.  Only 1 inquiry in the past 12 months and that was the mortgage pre-qual HP.    As a note, my Transunion FICO 8 just updated today to 850 as well, so trifecta of 850.   I can pull my new 3B next week, so definitely curious to see what the mortgage scores look like.  

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Another nice data point above showing 850 scores with high installment loan utilization. OP,  how much payment history do you have on each Auto loan? Age of open loans is a factor on one CRA and age of open + closed loans is a scoring factor as well. Looking at poster data over the years indicates there may be an aggregate installment B/L threshold around 70%. Any installment loan counts toward mix. Although a mortgage is evaluated differently, it is no more important to mix than another type of loan.

Generally posters with other open installment loans "substantially paid down" report a drop in score when getting a mortgage. This is typically due to AoYA dropping to zero and the spike up in installment utilization.

Back in 2015 Ubuntu posted having an 850 score with no (ZERO) open loans on file. Links to that post have been provided on a number of other threads. Not sure why that post conveniently gets dismissed. Probably because it does not fit the forum paradigm. There has been a similar paradigm regarding non mortgage loans needing to be under 9% to "point out". Again, age may play a role here.

Admittedly, I find it difficult to believe the 850 was achieved even without a closed loan on file. Perhaps there was a car lease that counts as a loan but may not be recognized as such.

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Perfect-850-score-question/m-p/5037009#M129143

[Anonymous]

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@Thomas_Thumb wrote:

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@Anonymous wrote:

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@SouthJamaica wrote:

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@Anonymous wrote:

My wife and I are currently preparing for a mortgage loan on our new house set to close in December.  As part of that process, we have gotten our reports/scores as clean as possible based on advice from these forums etc.  In my research, I noted there were not a lot of data points out there on mortgage loans or lack thereof and impact to your scores.   Well as of today, my EQ FICO 8 and EX FICO 8 scores both hit 850.  Transunion FICO 8 is stuck waiting on a balance update, so curious to see what that does.  

My main point here though is that we sold our prior house and the mortgage loan reported as closed/$0.  We do have 2 other auto installment loans, both not under the 9% threshold.  Thought that was an interesting data point with no open mortgage and achieving 850 scores.  Overall utilization is around 1-2% on revolving cards, about $120k total credit limit.  Curious to see what the mortgage scores look like on my next available 3B report.  Thanks to the forums for all of the tips and tricks.

---

I agree that it is interesting. Especially the fact that your installment utilization is greater than 9%, meaning you're not completely optimized, and yet you're at 850 in FICO 8. This suggests that you have some strong buffer.

I'd already come to the conclusion that you don't need a mortgage to get 850, so long as you have sub-9% open installment loan utilization, but now I see you don't even need that.

I wonder how this is all playing out in your mortgage scores.

---

Thanks for the input, appreciate it. 

Yeah I read about the sub 9% installment loan utilization and we are definitely not at that.  One auto is at 72% util and the other around 44% util.  Further data points on my profile, oldest account is over 19 years and youngest is about 20 months.  Only 1 inquiry in the past 12 months and that was the mortgage pre-qual HP.    As a note, my Transunion FICO 8 just updated today to 850 as well, so trifecta of 850.   I can pull my new 3B next week, so definitely curious to see what the mortgage scores look like.  

---

Another nice data point above showing 850 scores with high installment loan utilization. OP,  how much payment history do you have on each Auto loan? Age of open loans is a factor on one CRA and age of open + closed loans is a scoring factor as well. Looking at poster data over the years indicates there may be an aggregate installment B/L threshold around 70%. Any installment loan counts toward mix. Although a mortgage is evaluated differently, it is no more important to mix than another type of loan.

Generally posters with other open installment loans "substantially paid down" report a drop in score when getting a mortgage. This is typically due to AoYA dropping to zero and the spike up in installment utilization.

Back in 2015 Ubuntu posted having an 850 score with no (ZERO) open loans on file. Links to that post have been provided on a number of other threads. Not sure why that post conveniently gets dismissed. Probably because it does not fit the forum paradigm. There has been a similar paradigm regarding non mortgage loans needing to be under 9% to "point out". Again, age may play a role here.

Admittedly, I find it difficult to believe the 850 was achieved even without a closed loan on file. Perhaps there was a car lease that counts as a loan but may not be recognized as such.

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Perfect-850-score-question/m-p/5037009#M129143

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On the auto loan history, roughly 20 months on the higher util loan and about 5 years on the lower util loan.  I also have multiple closed auto loans all in good status/$0 etc.  I'm sure that is a contributing factor as well.

That is interesting for sure on those data points on no open loan and 850.  Thanks for passing along that post, good reading.

[Anonymous]

You mention that you have only one inquiry which was the mortgage pre-approval.  Would you mind telling us the exact date of this inquiry?   If it was in the 30 days prior to the 850 score pull, FICO was ignoring it and your 850 score was helped by actually having zero inquiries.

I am not surprised by our OP's result.  He was already getting at least some "installment utilization" scoring points (since a good chunk of his total open installment debt was paid off -- my guess is something like 55%).  And his scoring profile was otherwise pretty much perfect.  We know there is a buffer at the top of the model that lets a score go as high as 870 (or thereabouts) -- truncated to 850.  So a score of 835 plus 15 points for the partly paid off loans would be 850.

And as TT observes, maybe the model was giving him even more than 15.  But if it wasn't, his 850 is still quite plausible.

[Anonymous]

Mortgage HP was done around 6/20/18 or so.  The 850 trifecta FICO 8 scores are as of 10/24/18, as the TU F8 just updated to 850 yesterday.