New auto loan score effect results (EX learned a new trick?)

[marty56]

The results are in in what happend to me when I traded my truck in for a Lancer.  TU and EQ scores stayed the same but EX droped 17 points.  There was a new message on EX on what is hurting my score:

The remaining balance on your non-mortgage installment loans is too high.
Your FICO score weighs the balances of your non-mortgage installment loans (such as auto loan or student loans) against the original loan amounts. In general, when you first obtain an installment loan your balance is high, and as you pay this loan down, the balance decreases.

Keep this in mind: This factor will have less of a negative impact on your FICO score as you pay down your installment loans and the total balance decreases.

 FICO High Achievers [?] have paid down an average of 35% of the principal on their installment loans.

I did not monitor my credit (or care for that matter) 6 years ago when I got my truck so I dont know if this is a standard message or something new.  I also dont know if I got dinged for the new account or need to really pay down 35% of the principle which is almost 10 grand.

I wonder if they really mean principle and how would they know.

LOL I knew that my score might go down but I was suprised at the message.  Score still isnt bad and I am thankfull for what I have.

Message Edited by marty56 on 07-07-2008 02:45 AM

[haulingthescoreup]

I got the same message from EX the very first month that my car loan posted. Since it was brand new, it naturally had 100% util. Once the first payment posted, it went away and never came back. EX went back to the usual scoldings.

I *might* have lost an additional 9 points when the car loan posted (after the 65 I'd already lost from the app-o-rama), but it's hard to separate out what did what during that time period.

[marty56]

Thanks for the info.  When did you get your car loan if I may ask.

So it seems that EX really is more focused on % util vs # accounts reporting.

While I could pay the loan off sooner I am not going to do that.  I am now focused on paying my mortgage off in 6 years which will save me a ton of money compaired to the score benefit of reducing my car note from 5 years to 2.  I also need to beef up my emergencey fund so any extra money I have will go there.

I wont be applying for any new credit anytime soon (at least another year) till this account and my Visa card is a year old..

[Anonymous]

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marty56 wrote:

I wonder if they really mean principle and how would they know.

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Installment account TLs do include the original amount of the loan.

(Original amount) - (current balance) = (principal you have paid down)

[marty56]

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cheddar wrote:

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marty56 wrote:

I wonder if they really mean principle and how would they know.

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Installment account TLs do include the original amount of the loan.

(Original amount) - (current balance) = (principal you have paid down)

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Duh.  looked at the TL and saw that but for ome reason I had a pre-senior moment.  My bad.

[smallfry]

So EX dinged ya huh? That's strange. For the longest time TU listed that as my number 3 negative which was hurting my score until I had paid off 75% of the original balance of the loan. At that point I got a 14 point jump in my TU and my negatives dropped from 3 down to 2. TU Quarterly listed the pay down of the installment as the reason for the jump in my TU score.

[marty56]

Funny that the TC FAKO advice about installment loans turned out to  be true for another CRA.

[haulingthescoreup]

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@smallfry wrote:
So EX dinged ya huh? That's strange. For the longest time TU listed that as my number 3 negative which was hurting my score until I had paid off 75% of the original balance of the loan. At that point I got a 14 point jump in my TU and my negatives dropped from 3 down to 2. TU Quarterly listed the pay down of the installment as the reason for the jump in my TU score.

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I only got the comment one time (listed #3), and the next time, when it was reduced some tiny amount (it's a four year loan), the comments went back to OMG, you had a 90-day (just one, thank you); OMG, your average history is in negative numbers; OMG, you had lates on 3 different accounts (all 30-days except the one 90).

marty, I got the car loan in February during the first wave of the app-o-rama. Since it was a loan, it took its own sweet time about reporting.

Anyway, at least in my situation, it doesn't look like suddenly paying down the car loan would help me out much for now. If that message about installment util was replaced the next month with the same old, same old, it doesn't seem to be as significant as the other stuff.

Whereas those who have gotten their reports in good shape might well start getting dinged for this.

It sort of reminds me of those lovely arguments where after 45 minutes or so, one person starts desperately saying, "And furthermore, remember that time in 1974 that you hurt my feelings at the Wilson's party, in front of all those people?" Definitely scraping the barrel, indicating that real problems have pretty well been taken care of.

[marty56]

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haulingthescoreup wrote:
It sort of reminds me of those lovely arguments where after 45 minutes or so, one person starts desperately saying, "And furthermore, remember that time in 1974 that you hurt my feelings at the Wilson's party, in front of all those people?" Definitely scraping the barrel, indicating that real problems have pretty well been taken care of.

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I can see it now.  Fast forward to Nov 2011 (After my 120 day BofA falls off)

Whats hurting your  score:

Marty, remember when you had the 120 day late to BofA for a partial payment.  Well mister - partial doesnt cut it in FICO land so I am dinging you 2 points for that.  You are now 799 instead of 801.  Sucks to be you.

Maybe FICO should have read Don't Sweat the Small Stuff. 

[MattH]

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@marty56 wrote:
...

So it seems that EX really is more focused on % util vs # accounts reporting.

...

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Yes, I think EX does focus more on %util. I use several cards a lot, as my wife and both have good salaries and carry very little cash, so we run quite a bit through our cards and pay in full at the end of the month. So my balances can get fairly substantial on multiple cards, but the limits are high so %utilization remains low (and the balances never get carried over to the next month).

EX is the only one of the three that says "no negative factors" and gives me a score over 800, the other two give me scores between 780 and 800 with remarks about total balance on revolving accounts and number of accounts carrying balances.