Losing Open Installment - Any idea how much of a hit?

[EW800]

Hello Friends, 

Those that may have followed my story may recall that in 2011/2012, my wife and I went through some very ugly life challenges.  Praise the Lord, we have since recovered nicely, per the scores below.  

I currently have one open installment loan (auto) that is sitting at a balance of $100, paid a few years in advance, zero interest.  I have only kept it open so that I could show an open installment loan on my profile.  I assume that this one open installment loan, with the balance being way less than 10%, is a contributing factor to our 850 Fico 8 and Fico 9 scores, and auto-enhanced and Bankcard-enhanced scores being 895 to 900.  Our middle mortgage score is 824 or 825.  

I am thinking about just paying off the one open installment loan.  This would leave us with a total of three closed auto installment loans, and one closed mortgage installment loan (a second mortgage from many years ago).  I assume that with no open installment loans, we will lose our 850 Fico 8 scores, am I correct?  If so, any speculation as to how much of a hit it could be?  How about the mortgage scores, which are the most important to me.  Any idea how much of a hit they could take with no open installment loans?  I am thinking that I have read that they (mortgage scores) are not as sensitive to no open installment loans.  Any chance the hit to the mortgage scores would be very minimal?  

Thank you!  

[Revelate]

Possibly up to 45 points though we have seen cases of a buffer north of 850 so will probably be less.

Mortgage scores there has been some conflicting data, in my case only EX FICO 2 moved on installment utilization but the big question is simply this:

You are several years ahead, why pay it off?

[EW800]

Hi Revelate,

In reality, now I am thinking there is really no good reason to pay it off, especially seeing that the point loss could possibly be significant. I have no plans to sell the vehicle, it is still pretty new and low miles, so I am thinking it may just be best let the balance sit at the $100 and enjoy the point benefits as long as possible, especially with it being 0% interest.

Thank you very much for the information and insight!

[SouthJamaica]

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@EW800 wrote:

Hello Friends, 

Those that may have followed my story may recall that in 2011/2012, my wife and I went through some very ugly life challenges.  Praise the Lord, we have since recovered nicely, per the scores below.  

I currently have one open installment loan (auto) that is sitting at a balance of $100, paid a few years in advance, zero interest.  I have only kept it open so that I could show an open installment loan on my profile.  I assume that this one open installment loan, with the balance being way less than 10%, is a contributing factor to our 850 Fico 8 and Fico 9 scores, and auto-enhanced and Bankcard-enhanced scores being 895 to 900.  Our middle mortgage score is 824 or 825.  

I am thinking about just paying off the one open installment loan.  This would leave us with a total of three closed auto installment loans, and one closed mortgage installment loan (a second mortgage from many years ago).  I assume that with no open installment loans, we will lose our 850 Fico 8 scores, am I correct?  If so, any speculation as to how much of a hit it could be?  How about the mortgage scores, which are the most important to me.  Any idea how much of a hit they could take with no open installment loans?  I am thinking that I have read that they (mortgage scores) are not as sensitive to no open installment loans.  Any chance the hit to the mortgage scores would be very minimal?  

Thank you!  

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My experience with loss of single installment loan effect on mortgage scores was that TU FICO 4 reacted adversely, but with only about 1/5 of the force that FICO 8's reacted, while EX FICO 2 and EQ FICO 5 didn't react at all. I.e. sustaining a 30 point loss in FICO 8's would translate to about 6 points off in TU FICO 4 and no points off in EX FICO 2 and EQ FICO 5.

[Revelate]

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@EW800 wrote:
Hi Revelate,

In reality, now I am thinking there is really no good reason to pay it off, especially seeing that the point loss could possibly be significant. I have no plans to sell the vehicle, it is still pretty new and low miles, so I am thinking it may just be best let the balance sit at the $100 and enjoy the point benefits as long as possible, especially with it being 0% interest.

Thank you very much for the information and insight!

---

That's basically my own plan, I'm not at 0% (just south of 4 actually) but at low dollar values the interest is irrelevant.  Took the 72 month term, already halfway paid off a year in and will let it ride at some trivial dollar amount for as long as I can.  

[EW800]

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@Revelate wrote:

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@EW800 wrote:
Hi Revelate,

In reality, now I am thinking there is really no good reason to pay it off, especially seeing that the point loss could possibly be significant. I have no plans to sell the vehicle, it is still pretty new and low miles, so I am thinking it may just be best let the balance sit at the $100 and enjoy the point benefits as long as possible, especially with it being 0% interest.

Thank you very much for the information and insight!

---

That's basically my own plan, I'm not at 0% (just south of 4 actually) but at low dollar values the interest is irrelevant.  Took the 72 month term, already halfway paid off a year in and will let it ride at some trivial dollar amount for as long as I can.  

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Appears that we did pretty much the same thing!  I took out a 72 month auto loan through Ford's 0% promo, then paid just over half off in the first couple of months and then kept aggressively making payments, until I got it down to just $100 where it is now.  I know some people would call that crazy on a 0% loan, however I really wanted to have the loan under 10% ASAP not just for the points, but after what my wife and I wet through in 2011 and 2012, I absolutely hate debt!  

[Anonymous]

I had a similar plan with my car loan. Paid it down to under 1% remaining and next payment due in 2022, but then decided to celebrate 1 year of ownership by paying off the remaining $80 last week. Experian Fico 8 dropped from 831 to 792 with no other changes. I was expecting a 30 point drop so the 39 only stung slightly. I have not seen my other fico score versions yet. 

[Anonymous]

Found I lost 22 points off of Fico 08. Suspect it will have a lot to do with our files YMMV as has already been mentioned. The loss of an installment loan has happened to me several times and for my file it has stayed around 22 to 26 points.

[EW800]

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@Anonymous wrote:

I had a similar plan with my car loan. Paid it down to under 1% remaining and next payment due in 2022, but then decided to celebrate 1 year of ownership by paying off the remaining $80 last week. Experian Fico 8 dropped from 831 to 792 with no other changes. I was expecting a 30 point drop so the 39 only stung slightly. I have not seen my other fico score versions yet. 

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A 39 point hit - ouch!  I think this just confirms even more that I am better off little the $100 blance ride for a few years.  

Thanks again to all for the info!  

[Anonymous]

I was in the same predicament as you a couple of years ago. I took out a 60 month auto loan at very low interest, and aggressively paid it down in a year to almost nothing. I left a trivial balance of a couple hundred dollars and was planning to let it ride for the rest of the duration of the loan to have the open installment on my reports. However, I wanted that car title just for peace of mind knowing my car was fully paid off. So instead, I used the SSL trick and opened an installment loan with Alliant before right before they closed the SSL loophole. I then paid off BoFA and got my title, while paying the SSL down under 9%. 

Had I not opened another installment loan, I suspect I would've lost at least 30 points from 850 on FICO-8. That would be my suggesiton, find a bank or CU that still has an SSL loan program, open an account with them, then pay off your car loan to get the title in hand.