@sjt wrote:
@SouthJamaica wrote:
@sjt wrote:Hi All,
I have an auto loan with a balance of $18.8K and the loan amount is $24.4K (77% utilization). This is my only installment loan I have. My revolving (credit cards) is less then 1% (currently AZEO). Current FICO 8 scores are EX 743, EQ 761, and TU 788.
My question is what are the breaking points for a score bump. I know 8.9% is one of the breaking points but does anyone know wht the others are?
Several years ago I tested it, for FICO 8, and while I don't remember the results, I do remember that most of the breakpoints I tested had no effect, the improvements I did experience were small, and the error code for high installment balance never went away, even when I was down to 14%. But when I got down to 9% I was in the promised land.
How much of the score increase, when you brought the loan down below 9%, did you lose when the loan was paid off?
Sorry to say.... all of it.
FICO 8 is crazy in my book, giving you more credit for an unpaid loan than for a paid off loan.
@Anonymous wrote:I'm pretty sure that SJ has said in the past that when he paid down his only installment loan from just over 8.9% to just under 8.9% he gained 20+ points. If the entire loan is "worth" (say) 30 points, that would suggest that 10 points was gained from 8.9%-99.9% utilization and 20 points for the rest. I'm not sure if this is profile-specific or not. With the SSL technique I'm not sure if anyone has ever tested for different thresholds? It would be cool if someone were to try that if not. Since most people open the loan and pay it down to 8% or so immediately, they see the full 30 point or so gain, so there's no way to know how many points were gained from bringing the loan down to above the 8.9% threshold.
An interesting test even if someone wasn't willing to go for all the data points would be to take a SSL from 100% utilization down to something in the 10%-15% range or so. Let that report, pull scores, then take it down to 8% the following cycle and again let it report and pull scores.
Well I did that once, but it would take me ages to find the post in which I laid out the results. But I distinctly remember that the breakpoints were relatively meaningless until I got to 9%. Yes it's possible that your estimates are right, losing 30 points for the loan, picking up about 10 points on the way down to 9%, picking up about 20 points when hitting 9%, and going back to square one when the loan is paid off.