I posted few weeks back regarding DW FICO 8 on EX....
She has exceptional payment history excepting (3) charge offs with USAA, Kohls, and Cap1. We settled on those accounts in 2019 last one was Cap1 with payment made 12/9. It updated in January but still showing $700 balance as they have not done second update yet to 0 the balance.
She has active mortgage and as of the start of the month (3) active student loan accounts. This was about 9-10 accounts but we have been paying them down. So end of Feb she is sitting at 688 (she was at 701 in December but has gradually lost 6 points per month as student loan payoffs update.
Also in Feb, paid off 1 of the 3 remaining active SLs. It was at $600 balance and < 8.9% so of course I understand that she is likely getting a boost for this being an active installment less than 8.9 balance.
Today that account updates to paid, 0 balance. Boom. 17 point drop.
Wow.
Meanwhile still waiting on Cap1 to update to 0.... if I dont see something in March gonna have to contact Cap1 on that as to why it appears they have not updated EX, TU, or EQ given pay date of 12/7.
Not really a question in all this... of course she is disgruntled in the process having gone from 620 to 701 last year only to see that fall to what is now 671. TU and EQ are similar I just dont have regular updates for them like EX for her profiles.
The only changing factor since the 701 score is paying off the SLs with lowest balance lump sum payments each month.
That seems unlikely for paying off a SL with 2 others and a mortgage outstanding honestly.
While I'd be interested to know before and after balance vs. original loan amounts for each if you're willing to share and maybe the payoff triggered going above the higher limit, it just seems likely that something else changed.
@satio wrote:I posted few weeks back regarding DW FICO 8 on EX....
She has exceptional payment history excepting (3) charge offs with USAA, Kohls, and Cap1. We settled on those accounts in 2019 last one was Cap1 with payment made 12/9. It updated in January but still showing $700 balance as they have not done second update yet to 0 the balance.
She has active mortgage and as of the start of the month (3) active student loan accounts. This was about 9-10 accounts but we have been paying them down. So end of Feb she is sitting at 688 (she was at 701 in December but has gradually lost 6 points per month as student loan payoffs update.
Also in Feb, paid off 1 of the 3 remaining active SLs. It was at $600 balance and < 8.9% so of course I understand that she is likely getting a boost for this being an active installment less than 8.9 balance.
Today that account updates to paid, 0 balance. Boom. 17 point drop.
Wow.
Meanwhile still waiting on Cap1 to update to 0.... if I dont see something in March gonna have to contact Cap1 on that as to why it appears they have not updated EX, TU, or EQ given pay date of 12/7.
Not really a question in all this... of course she is disgruntled in the process having gone from 620 to 701 last year only to see that fall to what is now 671. TU and EQ are similar I just dont have regular updates for them like EX for her profiles.
The only changing factor since the 701 score is paying off the SLs with lowest balance lump sum payments each month.
When there are multiple open loans, the utilization percentage of any one of them is irrelevant; it's the aggregate installment utilization percentage that is a factor. When one of the 4 open loans is paid off, the original loan amount is dropped from the denominator.
E.g.:
Mortgage 40,000/100,000
SL1 3000/15,000
SL2 4000/10,000
SL3 600/10,000
Aggregate = 47,600 (40,000 + 3000 + 4000 + 600)/135,000 = 35.3%
After paying off SL 3, aggregate = 47000/125000 = 37.6 % (+2.3%)
From a purely scoring perspective, it's best to leave a mostly paid down loan open as long as possible.
From a life perspective, though, it's good to get rid of a debt.
She can take comfort in the fact that although the payoff had a negative effect on FICO 8's, it probably had zero effect on her mortgage scores.
^^ Thank you for this.
Appreciate the insight as it relates to the loan aggregate component of FICO scoring.
For now, scores don't really matter as we are focused bringing all debt to zero other than maintaining the existing mortgage on the home we share which we will have fully accomplished in a few short months. We only have the two remaining active SLs with only about 3k balance remaining.
After struggling for so many years, its a totally different place to be cash positive every month building reserves and retirement accounts.
And I'm certain her scores will gain a little back month to month as baddies age and will shoot straight up when those baddies (the COs we settled in 2019) for her actually fall off altogether in 2021.
At that point she will have a substantial history of nothing but exceptional perfect positive paid accounts.
@Revelate wrote:That seems unlikely for paying off a SL with 2 others and a mortgage outstanding honestly.
While I'd be interested to know before and after balance vs. original loan amounts for each if you're willing to share and maybe the payoff triggered going above the higher limit, it just seems likely that something else changed.
I started to post the pertinent accounts but in doing so I just discovered what may be the trigger.....
Real Estate Loans
Current mortgage held by Chase was just sold this past month. Chase has updated the account as $0 balance and paid but the new mortgage holder has not yet posted the active account.
I wonder how that will get reported? I hope it is the original note balance and then the current balance as we had that under 85%.
@satio wrote:
@Revelate wrote:That seems unlikely for paying off a SL with 2 others and a mortgage outstanding honestly.
While I'd be interested to know before and after balance vs. original loan amounts for each if you're willing to share and maybe the payoff triggered going above the higher limit, it just seems likely that something else changed.
I started to post the pertinent accounts but in doing so I just discovered what may be the trigger.....
Real Estate Loans
Current mortgage held by Chase was just sold this past month. Chase has updated the account as $0 balance and paid but the new mortgage holder has not yet posted the active account.
I wonder how that will get reported? I hope it is the original note balance and then the current balance as we had that under 85%.
That is the way it will work. Who'd they sell it to out of curiosity?
@Revelate wrote:
@satio wrote:
@Revelate wrote:That seems unlikely for paying off a SL with 2 others and a mortgage outstanding honestly.
While I'd be interested to know before and after balance vs. original loan amounts for each if you're willing to share and maybe the payoff triggered going above the higher limit, it just seems likely that something else changed.
I started to post the pertinent accounts but in doing so I just discovered what may be the trigger.....
Real Estate Loans
Current mortgage held by Chase was just sold this past month. Chase has updated the account as $0 balance and paid but the new mortgage holder has not yet posted the active account.
I wonder how that will get reported? I hope it is the original note balance and then the current balance as we had that under 85%.
That is the way it will work. Who'd they sell it to out of curiosity?
Someone named Carrington.