@Empires wrote:Just pulled myfico Score 8 and got this:
Percentage of principal you have paid down on your open non-mortgage installment loans: 61%FICO High Achievers have paid down an average of 40% of the principal on their non-mortgage installment loans.Yet it is showing that this is a negative factor hurting my score. Why is that?
Your loan balance divided by original loan amount is your installment loan utilization. And just like revolving credit line UTL, higher utilization percentage equates to higher credit risk from a lenders perspective and will typically lower your scores in a given Fico algorythm. Drive that balance down and you'll begin to see increases in your scores.
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@Empires wrote:Just pulled myfico Score 8 and got this:
Percentage of principal you have paid down on your open non-mortgage installment loans: 61%FICO High Achievers have paid down an average of 40% of the principal on their non-mortgage installment loans.Yet it is showing that this is a negative factor hurting my score. Why is that?
it's likely going to be a negative reason code until it reaches something silly like 92% paid off
however that "negative" is outweighed by the 'positive' of having an open loan relatively paid off, even if that's not listed in your reason codes.
if that's your only loan and you pay it off, your score will likely drop from where it is now
@Empires wrote:Just pulled myfico Score 8 and got this:
Percentage of principal you have paid down on your open non-mortgage installment loans: 61%FICO High Achievers have paid down an average of 40% of the principal on their non-mortgage installment loans.Yet it is showing that this is a negative factor hurting my score. Why is that?
It's usually a negative, rather than positive, reason code until it's paid down below 10%.
It has significant effect on FICO 8's and 9's, little if any effect on mortgage scores.
