Paid off loan-score dropped

[Reighn9]

I posted the following under AutoLoans and it was suggested I look in the fico score forum for answers. I was also told it is suggested to take out an installment loan and let it report for months or years to bump up the score. I've had installment loans like that in the past and never seen an increase in my score.

I paid off my auto loan 4 or 5 months early and my credit scores dropped-EQ 23 points and EX 15 points. I haven't heard from TU yet. My scores had just started moving above 675 and more as I was paying down cards. I had been having trouble with my high car payment and the company, who I had a long, strong relationship with, refused to refinace to a lower payment a few months ago. I didn't know paying off a loan with good payment record would drop a credit scrore. The CRAs keep complaining about the loan balance being too high.

I have nothing derogatory on my reports. The complaints are high bankcard balances, high loan balances, high revolving balances, etc. The CRAs just reword high balances any way they can.

[DollyLama]

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I have nothing derogatory on my reports. The complaints are high bankcard balances, high loan balances, high revolving balances, etc. The CRAs just reword high balances any way they can.

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Therein, lies 95% of keeping your scores from getting a good boost. It is the utilization of your cards. You ideally only want one CC to report and with a balance under 9% and the rest being zero balance. As far as scoring you need to maintain a credit mix of installment and revolving debt open. So pay down those CC's. You just lost from what I understand your only? installment loan? You will take a hit. There is a way of obtaining a SSL and how to proceed on these forums, if you no longer have any installment debt. Perhaps someone will come along and give a direct link, or a search will help. You should see a bounce back if you do this. 

[newhis]

Share secured loan technique:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

If you don't have any open loan, this will help to get your points back (credit mix).

[Anonymous]

Great advice from DL about keeping your CCs reporting very low.  You can still use them a lot if you like, they just need to report small values.  Let us know if you want help with how to make that happen.

As far as your installment loan situation goes, it sounds as though all your installment loans are now paid off -- is that right?  If so, you are a perfect candidate for the Share Secure Loan technique.  It is painless and costs you almost nothing.  It will get you an increase of about 30 points on your FICO 8 scores.

Below is a description of how it works.  All you need to do is read the first couple posts in that thread.  They will also give you the conceptual fraework for understanding how FICO 8 scores installment debt, why the payoff of a loan can cause a score drop, etc.  But more important it gives you an easy solution to it.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

[Anonymous]

LOL... I see Newhis beat me to the punch.

[NRB525]

OP, so your score with the auto loan was approaching / at 675 and is now in the neighborhood of 650?

Are you sure there are no late payments anywhere in your past?

What credit card limits do you have, and what is the utilization on each of those credit cards? You either have very high utilization or some sort of negative in your file, even if it seems like years ago. I don't know of any other reason for a file to be at 650.

[Reighn9]

I have been actively working on paying down the balances, starting with the lowest first.  This was not my only installment loan, I have two more, another auto loan and a personal loan.  The one I just paid was only a 36 month loan.  About a year ago, maybe a little more, I had a series of events happen. I lost almost half my income, somone trusted "borrowed" a couple of credit cards and some cash. I had a little over 750 average credit score at the time and it took a rapid nose dive as my utilization went up.  I got rid of as many unnecessary payments as possible, but I couldn't reduce the $750 a month car payment which was hard to make every month.  I do have cards with zero balances, my utilization had gotten to 90-98% but I've gotten it down closer to 75-80%.  Yes my scores had hit in the 650 and a lower at times, level, but just recently had been coming up to 675, 683, 689.  I felt like I was about to get out of my hole.  No, I have no lates, or collections hiding, I check my reports constantly, it's just utilization.  As for credit limits, highest is $14500 and several near that.  Another problem I've had is some of my cards which I did not have high balances on reduced my credit limit enough that I did now have a high balance just because I had high utilization on other cards.  

[Anonymous]

If you have 2 other current open installment loans, the SSL technique would not help you at all so no need to plan on that at this time.

It definitely sounds like utilization is your biggest issue, so all you can do is continue doing what you have been and that's paying down those balances.

[NRB525]

Ok, good to hear no lates.

Can you list out the cards you have; bank, brand of card, credit limit and your current balance? There may be some things to consider for possible CLI to help a bit.

[Reighn9]

I can't get any CLIs because of the high utilization. My most recent CLI was from Credit One from $2200 to $2500 in January 2016. They were never bothered by high utilization on other cards. As long as I made good payments I got regular CLIs until my card was stolen and had unauthorized charges. The charges were removed and a new card issued, but no more CLIs. Before that the last CLI was November 2015 from Sam's Club Credit from $8500 to $9500. I had been getting regular CLIs about every 6-8 months. Here is the surprise-Sam's Club Credit just gave me a CLI to $10000 on March 2nd 2017 while my scores were in the 675-689 range before that loan pay-off posted. I really did think things were starting to turn around. I got a 2 point score increase from the CLI. Another card confusing me is Sears. I just got a letter I'm being upgraded to a Sears Mastercard as a preferred customer. Again this is during my upswing, but in August 2016 Sears decreased my credit limit from $3000 to $1850 causing my $1600 promotional balance utilization to skyrocket. Several other cards with little to no balances also decreased my CLs anywhere from $5000 to $500 lower-Discover, Target Visa, Barclaycard Arrival WMC, Haband dropped my available credit to $0 and American Express Green Card changed NPSL to a $1500 CL. Their reasons cited were high balances/utilization and payments too low. I always pay more than minimum, and AMEX was a PIF card, this was based on other cards not my history with these cards.

Chase does not give CLIs, but allow you to move available credit from one card to another-I have 5 Chase cards with CLs from $2000 to $6000. Capital One always has an excuse when it come to a CLI, I have 3 Mastercards with Capital One-1st $1500 got only CLI after 4 years 11/2013-2nd $2750 only CLI at 29 months with an upgrade to Quicksilver with Platinum terms-3rd $500 purchased from HBSC transition took over 2 years refuse to consider CLI.

With the score increase, letter from Sears, and Sam's CLI in the last week I really thought I was starting to make some progress until my scores dropped when the loan pay-off posted.