No credit card required
Browse credit cards from a variety of issuers to see if there's a better card for you.
Hello,
All 3 scores dropped 14-20 points when my auto was paid. However, I still have a mortgage and the NEW auto loan reported to all 3 CRA's BEFORE the trade-in was reported paid off. I understand that if it was my only installment loan I'd take a major hit but that's not the case. Any insight on this?
DP's:
1. Trade-in auto loan was from 9/2018 high balance of 40k and owed balance before pay off was 30k.Reported paid 8/7/2020
2. New auto loan is 41.5k. This loan reported before the payoff 8/1/2020. All 3 CRA's showed total owed in auto installments was 71k.
3. Mortgage is from 1/2020 for 199k high balance and roughly 197k owed.
I think you might want to calculate your aggregate utilization % before and after.
For installments:
96% --> 99% Aggregate Utilization (if the new auto loan was in fact counted)
95% --> 99% (if new auto loan not counted)
These include the mortgage.
@nyuphoto wrote:For installments:
96% --> 99% Aggregate Utilization (if the new auto loan was in fact counted)
95% --> 99% (if new auto loan not counted)
These include the mortgage.
Was the trade in a loan?
are you including that in your aggregate numbers?
Yes the trade in was a loan. I owed 30k and original loan amount was 40k. Both scenarios include this in the aggregate amounts.
@nyuphoto wrote:Hello,
All 3 scores dropped 14-20 points when my auto was paid. However, I still have a mortgage and the NEW auto loan reported to all 3 CRA's BEFORE the trade-in was reported paid off. I understand that if it was my only installment loan I'd take a major hit but that's not the case. Any insight on this?
I don't see the mystery. You went from 2 barely paid off loans to 3 barely paid off loans in your reports. I would expect your credit scores to lose a bit as your debt load was seen to increase.
That's sounds nice on paper but according to Fico scoring 1 installment loan is needed to maximize scores. My installment loan aggregate utilization changed 3 maybe 4%. My aggregate revolver utilization is 1%. Help me understand how 4% change should be a no brainer in dropping double digit points when I replaced a paid off loan with another loan and total aggregate changed a mere 3%.
@SouthJamaica wrote:
@nyuphoto wrote:Hello,
All 3 scores dropped 14-20 points when my auto was paid. However, I still have a mortgage and the NEW auto loan reported to all 3 CRA's BEFORE the trade-in was reported paid off. I understand that if it was my only installment loan I'd take a major hit but that's not the case. Any insight on this?
I don't see the mystery. You went from 2 barely paid off loans to 3 barely paid off loans in your reports. I would expect your credit scores to lose a bit as your debt load was seen to increase.
To be clear with data points:
I went from 2 loans to 3 loans and back to 2 loans. All within less than a week. I traded a car in and literally paid off a loan and replaced it with another loan.
Installment aggregate 97% to 99%.
Revolver aggregate 1%.
20 point drop in FICO 8.
@nyuphoto wrote:That's sounds nice on paper but according to Fico scoring 1 installment loan is needed to maximize scores.
You already had 2 before the new loan reported.
My installment loan aggregate utilization changed 3 maybe 4%.
Not especially impactful.
My aggregate revolver utilization is 1%.
Another subject entirely.
Help me understand how 4% change should be a no brainer in dropping double digit points when I replaced a paid off loan with another loan and total aggregate changed a mere 3%.
You yourself said that the new loan had reported but the paid off loan hadn't. So as far as your reports are concerned you now had 3 barely paid off loans instead of 2.
You keep coming back to a 3% change in installment utilization percentage but I don't understand why.
This is not a significant milestone; it is virtually meaningless. And this is not the reason your score went down. It went down because as far as the reported data is concerned, you've taken on more debt.
@SouthJamaica wrote:
@nyuphoto wrote:Hello,
All 3 scores dropped 14-20 points when my auto was paid. However, I still have a mortgage and the NEW auto loan reported to all 3 CRA's BEFORE the trade-in was reported paid off. I understand that if it was my only installment loan I'd take a major hit but that's not the case. Any insight on this?
I don't see the mystery. You went from 2 barely paid off loans to 3 barely paid off loans in your reports. I would expect your credit scores to lose a bit as your debt load was seen to increase.