@iced wrote:I've noticed two different scoring reactions for what was essentially the same action taken twice in the same year, and I'm trying to narrow down if it even has to do with those actions or if it exposed a different issue that needs addressing.
- At the start of this year, my EX8 was 763. I had two delinquint accounts reporting (both 6+ years old) and three installment loans on my report (1 auto, 1 mortgage, 1 student loan). CCs are PIF every month, but report a balance fluctuating from 1 to 5% of my total CL; that is, these should be a non-factor in my scoring other than to wiggle it a point or two month-to-month.
- In April, my EX8 went up to 790 when one of the 2 delinquint reportings finally aged off my report.
- In June, the mortgage was paid off. Score did not move (other than the usual 1-2 points per month movement due to whatever my CC balance was that month).
- In September, the student loan was paid off. Score fell from 790 to 775. It's an insignificant point shift in the grand scheme of things, but I was a little surprised to see this nonetheless.
As of the 775 score report, my EX report shows:
- 1 30+ late payment, with a time-since-late of 6 years, 9 months.
- 0 public record/collection
- 6 open accounts (1 installment)
- 3% revolving utilization
- AAoA is 8 years, 8 months with AoOA 13 years 6 months and AoYA 1 year 3 months
- 1 inquiry
At first, I thought it was my auto loan, but it's got a < 40% balance remaining, and I thought below that mark the scoring wasn't all that affected. I wonder if it could be that my 3 oldest accounts (CC, mortgage, student loan) all closed this year, but they stay on my report for 10 years so that doesn't seem correct, either. The report above seems to confirm that.
So what made FiCO decide that I did something wrong last month?
The big number in installment loans is to get down to 9% in the aggregate. When you get down to that number you get a bonus in the FICO 8 scores.
Usually each time you pay off a loan which has already been mostly paid off, you are increasing that percentage.
@iced wrote:
@SouthJamaica wrote:The big number in installment loans is to get down to 9% in the aggregate. When you get down to that number you get a bonus in the FICO 8 scores.
Usually each time you pay off a loan which has already been mostly paid off, you are increasing that percentage.
The student loan had a balance of around 20% of original loan amount when I paid it off, so my aggregate would have been lower though nowhere near 9% for installments. That is, I'm not sure I was getting the scoring bonus to begin with, so it wouldn't have been taken away.
That said, the percentage now would have gone from 25% to around 40%. If that's enough to bump up a bracket and cause a score loss, I guess that could be the cause, though that leaves me wondering why the mortgage payoff earlier didn't result in a score bump as it was over 50% at the time of payoff.
9% is the big one, but there are other bonuses on the way down. When you paid down a loan that was 80% paid off that probably cost you some points by increasing your aggregate loan utilization percentage from, as you say, 25% to 40%.
If the mortgage was 50% paid off, paying it down to zero didn't hurt your utilization percentage at all; in fact it helped a little.
