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Score Drop 2 months after opening installment accounts

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Valued Contributor

Score Drop 2 months after opening installment accounts

January 1st brought a weird score dip on EX that I was not expecting. In October 2019 I financed a new car and refi'd my student loans. Both reported the balances and updated with payments for November and December. As of today, my score droppes 14 points and I got a new reason code of "remaining balance of installment loans is too high." This is the only change.

Sort of curious why this would hurt me now, 2 payments in on each rather than at the establishment and reporting of the accounts in October? Any insights would be appreciated.
Bourbon and bow ties.
Current Cards:



2020 Goals:
$100K total CL (through organic/soft pull growth; COMPLETE!)
750+ across bureaus
No real goal cards for now
Garden Forever.
Message 1 of 9
8 REPLIES 8
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Valued Contributor

Re: Score Drop 2 months after opening installment accounts

Hmmm... I don't think it's because of the installment accounts (since they reported prior to Jan 1st). If this score drop occurred between Dec. 31st and Jan 1st., sounds like a "rebucketing" scenario to me - which switched up your reason codes.

Pass any aging thresholds Jan 1?
Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 05/2020: EX 780 ✦ EQ 758 ✦ TU 781
Current FICO 9s | 04/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.1 years not incl. AU / 3.5 years incl. AU
My AoOA: 7.3 years not incl. AU / 9.3 years incl. AU
Inquiries: EX 1/6 | 1/12 ✦ EQ 1/6 | 1/12 ✦ TU 1/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 2 of 9
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Valued Contributor

Re: Score Drop 2 months after opening installment accounts

I don't think 3 yrs 2 mo (with closed AU accts) or 1 year 11 mo (account holder ) is a threahold for AAoA. The only change on my report involved the addition of the third reason code listed above.
Bourbon and bow ties.
Current Cards:



2020 Goals:
$100K total CL (through organic/soft pull growth; COMPLETE!)
750+ across bureaus
No real goal cards for now
Garden Forever.
Message 3 of 9
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Valued Contributor

Re: Score Drop 2 months after opening installment accounts

Ok - so not for AAoA....

Oldest account? Youngest account? Aged derogs?
Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 05/2020: EX 780 ✦ EQ 758 ✦ TU 781
Current FICO 9s | 04/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.1 years not incl. AU / 3.5 years incl. AU
My AoOA: 7.3 years not incl. AU / 9.3 years incl. AU
Inquiries: EX 1/6 | 1/12 ✦ EQ 1/6 | 1/12 ✦ TU 1/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 4 of 9
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Super Contributor

Re: Score Drop 2 months after opening installment accounts


@dberryhill wrote:
I don't think 3 yrs 2 mo (with closed AU accts) or 1 year 11 mo (account holder ) is a threahold for AAoA. The only change on my report involved the addition of the third reason code listed above.

@dberryhill AAoA is not a segmentation factor and could not result in scorecard reassignment (rebucketing). As @thornback suggested, to determine that, please provide the stats listed on my siggy. Is your file clean? We know it's thick, AoOA? AoYR (Age of youngest revolver)?

 

No, I doubt either of those is a threshold for AAoA. Be aware HPs for loans are buffered for 30 days, but not 60, so I'd also look for other changes as well. Last is it a FICO score?

For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.

RIP:







Updated June 2020, unless otherwise noted. I took an HP on EX, will reflect on next update.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (aged/nonaged), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/aged/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 5 of 9
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Valued Contributor

Re: Score Drop 2 months after opening installment accounts

The score that dropped was Fico 8. Ive searched through everything. Only thing that changed is reduction of balance on my installments. Here some more info:

AoYA: 2 months (US Bank AR)
AoOA: 5 years, 6 months
AAoA: 1 year, 11 months
util: 8%
4 inquiries in past year. The file is clean theoretically (no missed payments reason code; does not have "presence of a serious delinquency" reason code). The student loan account with my 90 day only sits on TU and EQ, where I also have a much longer AAoA.

I guess part of it could just be a lag from the new installment loan. Do they bucket you based on dollar value of installment loan? Does a refi (the closing then opening of an installment) perform differently than paying off one and opening another?
Bourbon and bow ties.
Current Cards:



2020 Goals:
$100K total CL (through organic/soft pull growth; COMPLETE!)
750+ across bureaus
No real goal cards for now
Garden Forever.
Message 6 of 9
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Super Contributor

Re: Score Drop 2 months after opening installment accounts

@dberryhill OK, EX FICO 8. So on EX you are clean?

OK when did the US Bank AR hit? Can you rule it out as a potential cause? Do you know when it hit and what score change it caused?

No, you are not bucketed based on dollar amount of anything.

A re-fi is similar to opening and closing loans. The question becomes when did the old one report closed with 0 balance and when did the new one hit? But you said they all reported last year.

When you open a new loan, your individual installment utilization becomes 100%. FICO scoring is believed to consider aggregate installment utilization.

So what was your aggregate installment utilization beforehand and after it was all done?

I'm with @thornback. I think it was caused by something else. Have you went line by line and ensured no old account fell off? No revolving utilization changes?
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.

RIP:







Updated June 2020, unless otherwise noted. I took an HP on EX, will reflect on next update.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (aged/nonaged), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/aged/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 7 of 9
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Valued Contributor

Re: Score Drop 2 months after opening installment accounts

Just to update this: seems the cause might be from Chase finally closing my auto loan (that I paid in March 2019...but became paid in full as of end of DEC 2019...no idea why). Totally forgot it was there on my file as open.

Definitely the closing of a low util loan did that. So it goes. Just wanted to update the item as to add color to the issue. Thanks all for your help!
Bourbon and bow ties.
Current Cards:



2020 Goals:
$100K total CL (through organic/soft pull growth; COMPLETE!)
750+ across bureaus
No real goal cards for now
Garden Forever.
Message 8 of 9
Highlighted
Super Contributor

Re: Score Drop 2 months after opening installment accounts

Glad you figured it out!

 

But FICO considers aggregate installment utilization. Hadn't another loan reported?

For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.

RIP:







Updated June 2020, unless otherwise noted. I took an HP on EX, will reflect on next update.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (aged/nonaged), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/aged/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 9 of 9
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