Raising Experian Auto Score

[Reighn9]

I need to re-fi my auto loan and already talked to my CU about requirements. They pull Experian Fico Auto 2 and it needs to be at least 650-699 for approval. I read under Auto Loans that your Auto score should be higher than the regular Fico if there have been no problems with auto loans, payments or repossesions. I've never had any issues but all of my alternate scores are lower than my Fico 8 at 655. What is the best way to raise the Experian Auto Score? I have high balances I'm starting to pay down but nothing else derogatory.

[Anonymous]

Do you have any open installment loans?  (Personal, student, auto, home, etc/)

If not, we can suggest a cheap and fairly quick way to raise your score.

What tools are you using to pull your reports and your scores?  When is the last time you reviewed your EX report (not score but report)?

What is your CC utilization (total, considering all cards combined together)?  Helpful here would be to list each card, its current balance, and its credit limit.  Something like this:

Card 1.   Balance = ____   Credit Limit = _____

Card 2.   Balance = ____   Credit Limit = _____

Card 3.   Balance = ____   Credit Limit = _____

etc.

[Reighn9]

Yes I have the open auto loan I want to refianance and a personal loan. I just paid off an auto loan 4 months early and my scores close to 25 points or more on each CRA.  I use MyFico 3B Ultimate monitoring and reports. I last looked at that full report in March and a regular report from Experian In January or February.  My utilization is about 84% maybe a little less beause I just paid off some more cards. That's down from 90%.  I've been woking on paying everything down.  I'll list all the cards later-total credit limit is near $140K, highest CL on a card is $14500 with a balance of $13000, lowest CL is a $400 gas card.

[bettercreditguy1]

In order for your scores to dramtically improve you will need to lower your utilization. Shoot for a first goal of 50% then get it lower than that. Most  Fico High Achievers have less than 6% utilization. Good luck in your journey.

[Thomas_Thumb]

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@Reighn9 wrote:

Yes I have the open auto loan I want to refianance and a personal loan. I just paid off an auto loan 4 months early and my scores close to 25 points or more on each CRA.  I use MyFico 3B Ultimate monitoring and reports. I last looked at that full report in March and a regular report from Experian In January or February.  My utilization is about 84% maybe a little less beause I just paid off some more cards. That's down from 90%.  I've been woking on paying everything down.  I'll list all the cards later-total credit limit is near $140K, highest CL on a card is $14500 with a balance of $13000, lowest CL is a $400 gas card.

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Get aggregate utilization (all cards combined) below 49% with 1/2 or less cards reporting balances. That should boost your score nicely. If you can get aggregate utilization below 29% that is a major milestone and your score should increase further. Key point - get all cards below 90% of CL as that is considered "max out" and a "max out" can severly hurt score and may lead to adverse action (AA) if not rectified. By AA I mean a CLD followed by a potential account closure.

Unfortunately, as you pay down your balances you may see corresponding drops in CL. Keep watch for such activity and contact the card issuer as appropriate to hopefully mitigate possible ongoing CL balance chasing. 

Note: Generally speaking, "responsible credit use" is defined as under 30% utilization of available revolving credit.

[Anonymous]

Great responses by the other folks.  Yeah, your problem is your ultra-high utilization.

TT's warning and advice is spot on.  Namely "as you pay down your balances you may see corresponding drops in CL. Keep watch for such activity and contact the card issuer as appropriate to hopefully mitigate possible ongoing CL balance chasing."

[Reighn9]

At the moment I have 14 cards that are showing balances over 90% but not the 4 with the highest CL. I can easily get 5 of these cards under 90% immediately and 3 more very soon. Some of them went over by the interest posting to the statement. I've already experienced some CLDs, one card dropped $1500 a few months after I paid off the balance, I called and a supervisor "reinstated" the CL, said I should make a small purchase, and the CLI would show on the next statement. When that didn't happen I called again and was told that person didn't have the authority to increase my CL, only the computer can. Another one dropped by $300-reason given when I called was my payments weren't high enough. I had been making at least 2 payments a month for more than twice the minimum on this account. I got a supervisor an found out my payments weren't high enough on other accounts, not theirs, in their opinion. One card recently dropped my limit from $3000 to $1850 when I made a $1200 purchase. I couldn't get a reason on that one. American Express Traditional green card with zero balance on an unlimited spending card wrote me a letter changing my terms to impose a CL of $1500. Never did anything to this company either. So, you are saying I can expect more of this when I start paying these balances down? I just want to re-finance a very bad auto loan and quit having emergcies. Thanks for the great advice. This might work a little better.

[Anonymous]

So here is how I think your CC issuers may be seeing things.  Your history of CC balances (as they have gradually gone up to almost 100% on most cards) is what people do when they are in huge trouble financially and will eventually be defaulting on their CC debt.  Not everyone does this, and you would have been the exception no doubt, but many people with that balance history do that.  And remember they can see not only the money you owe them but the money you owe everyone else.

So your CC issuers are stressed out -- if you owe them a bunch of money, they don't want to do anything that might induce you to injure them (not pay the money back).  In that sense you are (to them) like a guy with a loaded gun.  But as soon as they can get you to pay the money back, it's very possible their SWAT team is gonna land on you and take your gun away (i.e. your big credit limits, which they now perceive as something you could easily damage them with).  They may even close the accounts.  It's possible.  It's all about risk management from their perspective.

The folks in the Rebuilding or CC forums may have lots of mentors who have been in your shoes and can walk you through how to pay down the debt while at the same time reducing the chance that the issuers will keep lowering your CLs and or even closing accounts. 

The best thing to do is to face the fact that you are in a ton of debt and that the CC issuers are understandably worried that you can't handle it or those kinds of credit limits.  The best approach is to find people with experience who can help you and invest no energy in blaming the CC issuers, but instead find help in how to put your best face on toward them.  And once you get your CC debt paid off, identify how it got so bad and resolve to never carry a CC balance again -- use your cards sure but pay them off each month.

Your issue at this point is not one of "Understanding FICO Scoring."  This sub-forum is more for people trying to figure out how the FICO models work.  In your case there's no puzzle there -- you have incredibly high CC debt, which is a huge factor in every single FICO model.

My advice is to head over to the Rebuilding forum and try to get help there.  If the CC forum is better perhaps someone else can chime in and say that.  As TT explained, you need some mentor to help you on how to pay down your cards while reducing the chance that your issuers will keep lowering your CC limits as you do that.  (Or worse still, close the cards.)

I think TT and myself do not have a lot of personal experience with that (he and I both have very little CC debt) but we know there are kind sympathetic knowledgeable people on the Forum who do know all about it.  Your Yoda may be in the Rebuilding forum.

[Reighn9]

I've been on the Rebuilding forum and CC forum several times. I have been working with an advisor with a plan developed on paying down my cards. I have been paying down many of the balances but no one has given me any ideas how to keep the issuers from lowering the limits, or why my score dropped when I paid off my car loan or why my score drops as my balances drop. I know exactly how the debt got so bad and I was paying them off every month before that happened. I was referred to this forum from posters in these other forums because no one has a clue why my score drops as I pay down balances or the car loan except maybe that now the car loan showed up as a closed account. I will go back and ask again.

[Thomas_Thumb]

Fico 8 looks at aggregate balance to loan ratio (B/L) on all your OPEN installment loans. As this ratio decreases, score may go up - depending on whether your B/L drops from one scoring "bin" to the next lowest one. If your B/L drops but, stays in the same bin - no score change.

In your case you had two open auto loans and now you only have one. It is not unusual for that to trigger a score drop - here's an example why:

Let's consider the following basis:

1) Thhe older loan is a 5 year loan with an original loan amount of $21k. It was taken out 4 years, 10 months ago.

 - remaining balance is $300

2) The newer loan is also a five year loan. The original loan amount was $25k. It was taken out 8 months ago.

 - remaining balamce is $22k

Prior to pay off aggregate open B/L = $22.3K/$46k = 48.5% (age of open is 58 months) => may be worth 20 out of a possible 30 "installment loan" points

After payoff/closure aggregate open B/L = $21.8k/$25k = 87% (age of open is now only 8 months). => low loan age with B/L above 80% may be costing 5 to 10 points over not having an open installment loan

Thus, the increase in B/L to above 70% coupled with a major decrease in open installment loan age can drop Fico 8 score 20 to 30 points.