cancel
Showing results for 
Search instead for 
Did you mean: 

TU vantage score drop 710 to 660 from paying off lending club, account reported closed

tag
on
Established Member

TU vantage score drop 710 to 660 from paying off lending club, account reported closed

Timing couldn't be worse, getting reports pulled in a few weeks for mortgage application. Was paying down debt to get a better DTI. Paid off back in July, and at least my EQ caught it back then. Don't recall seeing that much of a drop there.

Is it common for a score to drop that much from paying off the personal loan?! Should I expect to see the same drop in FICO8?
Message 1 of 12
11 REPLIES 11
Medic981
Valued Contributor

Re: TU vantage score drop 710 to 660 from paying off lending club, account reported closed

VS and FICO do NOT equate. You will most likely see a drop in your FICO scores however your FICO mortgage scores are what you should be worried about, not FICO8 Scores or Vantage Scores which for the most part are worthless and are used by Credit Karma to tout credit cards.

 

An installment loan will have its greatest impact on your FICO score when the amount owed is at 8.9% or less of the original amount owed which is usually in the final months before the loan is paid in full. 

 

You may want to consider paying in full all of your credit card balances each month, before the posting date, except one. This is called the All Zero Except One (AZEO) method. The one credit card you allow to post a balance needs to be less than 8.9% of the credit limit of the card. So using one card each month to buy lunch, letting it report and then paying in full will maximize FICO scoring. Keeping your utilization of your cards below 28.9% both individually and collectively will prevent you from incurring a FICO scoring penalty.








Your FICO credit scores are not just numbers, it’s a skill.
Message 2 of 12
Anonymous
Not applicable

Re: TU vantage score drop 710 to 660 from paying off lending club, account reported closed

While you really shouldn't care about your Vantage scores, I assume you have no other open installment loans.  There is a definite scoring penalty associated with paying off your only open installment loan.  You get points for having a credit mix(revolving/installment).  You lose points if you lack either.

 

Are you letting revolving utilization report or did you pay that all off also?  Having 0% revolving UTI will reduce your scores also.  I would check your FICO scores as that will be the only thing that matters.  Credit Karma and free Vantage sites like that are good for account monitoring and that's it.  Don't worry about your scores on those sites.

Message 3 of 12
on
Established Member

Re: TU vantage score drop 710 to 660 from paying off lending club, account reported closed

I believe I have a mix? 5 CC and 3 Student Loans.

 

The personal loan had only a few months left and paying that off was an easy way to lower my monthly DTI. I know these numbers aren't great, but overall CC util is 35%, individual breakdown being 0, 21, 63, 77, 87. However, when the score was 710, the overall util was higher at about 43%. CK score simulator says that if I get overall util down to 34%, I'll see a 50 point jump. Understand not to put too much meaning into those scores, but it's the cheapest way to see how I'm trending.

Message 4 of 12
Medic981
Valued Contributor

Re: TU vantage score drop 710 to 660 from paying off lending club, account reported closed


@on wrote:

I believe I have a mix? 5 CC and 3 Student Loans.

 

The personal loan had only a few months left and paying that off was an easy way to lower my monthly DTI. I know these numbers aren't great, but overall CC util is 35%, individual breakdown being 0, 21, 63, 77, 87. However, when the score was 710, the overall util was higher at about 43%. CK score simulator says that if I get overall util down to 34%, I'll see a 50 point jump. Understand not to put too much meaning into those scores, but it's the cheapest way to see how I'm trending.


 

Ultimately, what a person needs to improve their FICO scores and build credit are three open credit cards (secured or unsecured) in good standing and one open installment loan in good standing such as a car, home, student, personal, share secured, or credit building loan. This combination is what the myFICO score theorists here have determined is what you need for optimal credit building and FICO score. You can have more CCs and more installment loans, however, this will not increase your FICO scores.

Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that you can handle credit responsibly. If you have open, active credit accounts that are being paid on time and pay all of your bills on time every time, apply for credit only when you actually need it and use credit cards sparingly maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way you can build good, solid credit.







Your FICO credit scores are not just numbers, it’s a skill.
Message 5 of 12
Queen_Etherea
Valued Contributor

Re: TU vantage score drop 710 to 660 from paying off lending club, account reported closed


@on wrote:
Timing couldn't be worse, getting reports pulled in a few weeks for mortgage application. Was paying down debt to get a better DTI. Paid off back in July, and at least my EQ caught it back then. Don't recall seeing that much of a drop there.

Is it common for a score to drop that much from paying off the personal loan?! Should I expect to see the same drop in FICO8?

Nope, nope, nope!! My Vantage Score dropped 80 points in the last week lol while my actual FICO 8 scores went up a few points. Credit Karma shows my TU score at 610, while my FICO 8 TU score is 691 (both updated Friday). CK should be ashamed of themselves for getting people worked up like that. 

 

I had some old student loans that were showing 120+ late on my EQ report only (they already dropped off my TU and EX reports) and when they came off, CK showed up scores dropping 54 points. In reality, they went up like 25 or something. 

 

Please pay no mind to those Vantage scores. They literally mean nothing! CK and other sites like it are only good for monitoring your reports, not scores. 

I think I've found the sacred map that may lead me to this garden everyone keeps talking about.



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 6 of 12
Anonymous
Not applicable

Re: TU vantage score drop 710 to 660 from paying off lending club, account reported closed

When you mention the All zero method and buying lunch on one card and letting it post....do you mean let it post so you pay interest on your lunch? I have 2 cards set up Right now that I use to pay for monthly expenses like electricity, Netflix, rent, internet etc. The basic things I would be paying monthly regardless. I have auto pay set up to pay the statement balance due at payment date.
Message 7 of 12
Revelate
Moderator Emeritus

Re: TU vantage score drop 710 to 660 from paying off lending club, account reported closed


@Anonymous wrote:
When you mention the All zero method and buying lunch on one card and letting it post....do you mean let it post so you pay interest on your lunch? I have 2 cards set up Right now that I use to pay for monthly expenses like electricity, Netflix, rent, internet etc. The basic things I would be paying monthly regardless. I have auto pay set up to pay the statement balance due at payment date.

No need to pay any interest: there's a grace period with I think all cards now, possible exception of the deep subprime ones like First Premier and Credit One and similar ones.  On every national bank card, major retail card, and credit union card, as long as you pay off the balance before the due date you don't pay any interest.  There's usually on the order of 20+ days from statement reporting date and due date so reporting a balance doesn't have anything to do with paying interest... letting it post simply means let the lender report the balance to the bureaus, don't prepay it to zero on ALL accounts, leave one with a balance pre-pay the others before statement cut to $0.

 

In your case re: interest, the one caveat historically is some lenders will pay off the most recent charges first, and as such if you don't zero it out at any point you *might* be paying interest... check your statements and see what your YTD interest payment is, if it's $0.00 proceed with confidence.




        
Message 8 of 12
SouthJamaica
Mega Contributor

Re: TU vantage score drop 710 to 660 from paying off lending club, account reported closed


@on wrote:
Timing couldn't be worse, getting reports pulled in a few weeks for mortgage application. Was paying down debt to get a better DTI. Paid off back in July, and at least my EQ caught it back then. Don't recall seeing that much of a drop there.

Is it common for a score to drop that much from paying off the personal loan?! Should I expect to see the same drop in FICO8?

1. Vantage scores have nothing to do with your mortgage, so forget about that.

 

2. What you need to do is pull your FICO mortgage scores and see what they say.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 9 of 12
Anonymous
Not applicable

Re: TU vantage score drop 710 to 660 from paying off lending club, account reported closed

In your case CC utilitization seems to be the killer. You were in the sweet spot with the loan < 8.9% mitigating some of your other utilization. I questioned the same, as I lost 40 points across the board when my only installment loan (auto) was at the end of its term and then paid in full.

 

Prior to that loan, I was stuck at 799 on TU and slightly above 800 on EQ and EX (with AZEO on cards). Continuing AZEO and after two years into the loan, I hit 850 and stayed there. Came down quite a bit after finances weren't so great and maxed out 2 out of 4 revolvers. They were still high utilization after the loan payoff, so no other differences.

 

HOWEVER, I am now at <1% and scores are right back to where they were prior to getting an auto loan, so in my case it was DEFINITELY high CC utilization, AND I only had 1 loan. You still have others.

I did another installment loan. 5 years. I plan not to app for a mortgage for at least a year (debating on whether or not to add to CC profile now, since they will age off together). However, when I am ready to app for a mortgage, I'll pay the loan down lower than 8.9% to hit 850 again. After that, hopefully I have a mortgage and won't have to do this every 4 or 5 years. Wasn't only for scoring though -- I did want a vehicle in 2015 and have use for funds through a loan now (some of which was to pay down cc debt). Adding the loan gave me a 2 point ding on EX. Others haven't reported yet, but don't imagine it will be much different.


Another takeaway -- In my case, adding installment debt and wiping out cc debt (even though CC's were paid down by other means) saw a substantial boost. Not going to be same for everyone else.

Message 10 of 12
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.