Scoring questions regarding a personal loan.

[willmsbrg]

Good morning all,

Okay, so here’s the story and some relevant questions.
Early last week, I applied for a personal loan ($14500.00) from Wells Fargo (my main bank). I was approved easily and received the funds the next day. I took a hard pull on Experian (3 point drop). The account hasn’t been reported yet. It’s now showing up in my online account page with the bank.

On Friday, last, I found out I am to receive a small inheritance from a relative toward the end of this month, which will do all the things I planned to do with parts of the personal loan. Technically, I no longer need the personal loan and I didn’t spend any of the loan proceeds yet…
I know I can’t cancel the loan since I received the money and the account will report to the CRA’s.

I know everyone says finances over Fico but I was wondering everyone’s thoughts.

My questions are;

1. How would/will it be reported if I just go ahead and pay it off now?

2. Could Wells Fargo blacklist me or place a possible negative note on the account when it reports? I also have their Autograph card in excellent standing.

3. How about any other possible negatives Fico related? I know the new account will get reported so I will take that hit in any case. 

Thanks in advance.

[pizzadude]

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@willmsbrg wrote:

Good morning all,

Okay, so here’s the story and some relevant questions.
Early last week, I applied for a personal loan ($14500.00) from Wells Fargo (my main bank). I was approved easily and received the funds the next day. I took a hard pull on Experian (3 point drop). The account hasn’t been reported yet. It’s now showing up in my online account page with the bank.

On Friday, last, I found out I am to receive a small inheritance from a relative toward the end of this month, which will do all the things I planned to do with parts of the personal loan. Technically, I no longer need the personal loan and I didn’t spend any of the loan proceeds yet…
I know I can’t cancel the loan since I received the money and the account will report to the CRA’s.

I know everyone says finances over Fico but I was wondering everyone’s thoughts.

My questions are;

1. How would/will it be reported if I just go ahead and pay it off now?

2. Could Wells Fargo blacklist me or place a possible negative note on the account when it reports? I also have their Autograph card in excellent standing.

3. How about any other possible negatives Fico related? I know the new account will get reported so I will take that hit in any case. 

Thanks in advance.

---

Congrats on the approval !  What interest rate / terms did you get with the loan?   My answers to your questions below:

1)  It'll be reported as paid in full / closed, depending on when you pay it may first report as open then closed on your next statement.  Also this is assuming this isn't an open ended line of credit.

2)  Highly doubt there would be any AA or negative ramifications from paying off early, also I assume there's no prepayment penalty but you should confirm. 

3)  Only FICO score hits would be the new account and the previous inquiry.

[willmsbrg]

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@pizzadude wrote:

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@willmsbrg wrote:

Good morning all,

Okay, so here’s the story and some relevant questions.
Early last week, I applied for a personal loan ($14500.00) from Wells Fargo (my main bank). I was approved easily and received the funds the next day. I took a hard pull on Experian (3 point drop). The account hasn’t been reported yet. It’s now showing up in my online account page with the bank.

On Friday, last, I found out I am to receive a small inheritance from a relative toward the end of this month, which will do all the things I planned to do with parts of the personal loan. Technically, I no longer need the personal loan and I didn’t spend any of the loan proceeds yet…
I know I can’t cancel the loan since I received the money and the account will report to the CRA’s.

I know everyone says finances over Fico but I was wondering everyone’s thoughts.

My questions are;

1. How would/will it be reported if I just go ahead and pay it off now?

2. Could Wells Fargo blacklist me or place a possible negative note on the account when it reports? I also have their Autograph card in excellent standing.

3. How about any other possible negatives Fico related? I know the new account will get reported so I will take that hit in any case. 

Thanks in advance.

---

Congrats on the approval !  What interest rate / terms did you get with the loan?   My answers to your questions below:

1)  It be reported as paid in full / closed, depending on when you pay it may first report as open then closed on your next statement.  Also this is assuming this isn't an open ended line of credit.

2)  Highly doubt there would be any AA or negative ramifications from paying off early, also I assume there's no prepayment penalty but you should confirm. 

3)  Only FICO score hits would be the new account and the previous inquiry.

---

Thanks, I was surprised at the ease with getting the loan...  The interest was 12% (with a 1/4 point discount) for 48 months at 385.00.

There is no pre-payment penalty nor was there any origination fee for the loan so it was the original amount deposited in my account. Actually, the first payment isn't even due until April 1st. It also wasn't an open ended line of credit. 

I won't want to wait to pay it off as it will be adding some interest with each day ($4.95 per day) according to Wells Fargo payoff tab..

Hopefully, the hit for the new account won't be too hard. I'm guessing 10-15 points but the long term reporting should be okay.

I do still have a car loan reporting each month so the credit mix is still intact.

[pizzadude]

Sounds like a good plan to go ahead and pay it off then.  Good to know that the approval was seamless and quick also !  

[SouthJamaica]

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@willmsbrg wrote:

Good morning all,

Okay, so here’s the story and some relevant questions.
Early last week, I applied for a personal loan ($14500.00) from Wells Fargo (my main bank). I was approved easily and received the funds the next day. I took a hard pull on Experian (3 point drop). The account hasn’t been reported yet. It’s now showing up in my online account page with the bank.

On Friday, last, I found out I am to receive a small inheritance from a relative toward the end of this month, which will do all the things I planned to do with parts of the personal loan. Technically, I no longer need the personal loan and I didn’t spend any of the loan proceeds yet…
I know I can’t cancel the loan since I received the money and the account will report to the CRA’s.

I know everyone says finances over Fico but I was wondering everyone’s thoughts.

My questions are;

1. How would/will it be reported if I just go ahead and pay it off now?

2. Could Wells Fargo blacklist me or place a possible negative note on the account when it reports? I also have their Autograph card in excellent standing.

3. How about any other possible negatives Fico related? I know the new account will get reported so I will take that hit in any case. 

Thanks in advance.

---

1. It will be reported as a paid off loan.

2. No there are no negative connotations to paying off the loan.

3. No there will be no significant negatives. It will show up as a new account and therefore will have a slight negative effect, which might not show up in points lost.

4. The question you did not ask: is there some alternative to paying it off completely that will actually help your FICO scores?   I would need to know the original loan amount and current balance on the auto loan, in order to answer that.

[willmsbrg]

4. The question you did not ask: is there some alternative to paying it off completely that will actually help your FICO scores? I would need to know the original loan amount and current balance on the auto loan, in order to answer that.

The auto loan still has a few years on that... and the payment amount is in a good position where I am not underwater with that loan, 

though I may take a few thousand from the inheritance and add to the auto principle to reduce the overall amount. The rate for the auto was/is lower than  the personal loan rate...

Oddly, Wells had a better personal loan rate that NFCU did for the same amount/term which surprised me to be honest.

[SouthJamaica]

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@willmsbrg wrote:

4. The question you did not ask: is there some alternative to paying it off completely that will actually help your FICO scores? I would need to know the original loan amount and current balance on the auto loan, in order to answer that.

The auto loan still has a few years on that... and the payment amount is in a good position where I am not underwater with that loan, 

though I may take a few thousand from the inheritance and add to the auto principle to reduce the overall amount. The rate for the auto was/is lower than  the personal loan rate...

Oddly, Wells had a better personal loan rate that NFCU did for the same amount/term which surprised me to be honest.

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Since you didn't answer my question I guess you don't care, which makes sense considering you never asked me the question

(But if you would like to know if there's a way to gain points from this loan, we would need to know, with respect to the auto loan, the original loan amount and the current balance)

[Anonymous]

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@SouthJamaica wrote:

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@willmsbrg wrote:

4. The question you did not ask: is there some alternative to paying it off completely that will actually help your FICO scores? I would need to know the original loan amount and current balance on the auto loan, in order to answer that.

The auto loan still has a few years on that... and the payment amount is in a good position where I am not underwater with that loan, 

though I may take a few thousand from the inheritance and add to the auto principle to reduce the overall amount. The rate for the auto was/is lower than  the personal loan rate...

Oddly, Wells had a better personal loan rate that NFCU did for the same amount/term which surprised me to be honest.

---

Since you didn't answer my question I guess you don't care, which makes sense considering you never asked me the question

(But if you would like to know if there's a way to gain points from this loan, we would need to know, with respect to the auto loan, the original loan amount and the current balance)

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I would think the only way to gain points would be to pay the loan down to below 10%.  But, that would be temporary as the bonus for a nearly paid off loan would disappear once it was fully paid. Is that where you were going with this?  I'm just curious

[SouthJamaica]

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@Anonymous wrote:

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@SouthJamaica wrote:

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@willmsbrg wrote:

4. The question you did not ask: is there some alternative to paying it off completely that will actually help your FICO scores? I would need to know the original loan amount and current balance on the auto loan, in order to answer that.

The auto loan still has a few years on that... and the payment amount is in a good position where I am not underwater with that loan, 

though I may take a few thousand from the inheritance and add to the auto principle to reduce the overall amount. The rate for the auto was/is lower than  the personal loan rate...

Oddly, Wells had a better personal loan rate that NFCU did for the same amount/term which surprised me to be honest.

---

Since you didn't answer my question I guess you don't care, which makes sense considering you never asked me the question

(But if you would like to know if there's a way to gain points from this loan, we would need to know, with respect to the auto loan, the original loan amount and the current balance)

---

I would think the only way to gain points would be to pay the loan down to below 10%.  But, that would be temporary as the bonus for a nearly paid off loan would disappear once it was fully paid. Is that where you were going with this?  I'm just curious

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No. As I said in both of my posts above, it depends on what the numbers are for the still open auto loan.

[Anonymous]

Understood.  I wasn't being antagonistic or looking for a specific answer regarding a score; just general information.  As I said, I was just curious.  I know about the bonus for having a loan paid below 10% (I believe it's 10%).  I'm also aware that utilization for installment loans is based on beginning balance versus current balance across loans. I was just wondering if there was something I was missing.  For example, if I had an auto loan (my only loan), that started with a balance of 10k, and currently owe 9k how would I gain points other than bringing the balance below, say 10%?  I'm always trying improve my scoring knowledge, so I hope you don'tmind me asking.