@Thomas_Thumb wrote:I am contemplating purchase of a new car and using my AMEX charge card for a $10k downpayment. If I take out a 5 year loan for the remainder, I suspect my Fico 08 would drop to around 840. I'd then pay loan down to under 60% to see if score bumps to 845. If interest rates are too high, I'd likely still use the AMEX but then pay cash for the remaining balance. Either way EQ Fico 04 might react violently to my AMEX.
It's still up in the air at the moment. I'm a bit concerned about car insurance rates tripling (a couple recent speeding tickets would come to light)
What's do your current installment lines look like TT? And if they're open w/current balance and original balance, how much car are you planning to finance dollar wise?
@Thomas_Thumb wrote:One open mortgage with about 4.5 years remaining on 15 year loan. The new car loan would increase overall balance to loan ratio from 33% to 38% initially. Intent would be to get a 5 year loan and pay off 40% of the loan in 90 days. The remainder would be paid as normal installments. This should result in the loan being paid off in around 3 years. However, if interest rate is 1.9% or less, I may forego early payments. [Note: my goal is to be loan free in 5 years].
I had a paid and closed mortgage on file. However, it aged off last year. No other loans of any type on file - open or closed.
It's the newbie account that I suspect would impact score (current youngest account is 4.5 years). The account would drop my AAoA 1.5 years but I have some buffer there.
As mentioned, the new car up in the air. The main concern is insurance rate for the new car after State Farm uncovers and factors in a couple - more than 15 mph over limit - speeding tickets in the last 3 years. We've been insured through SF for over 20 years and have an umbrella policy with them. No plans to shop around.
Ah I thought you were suggesting (based on the topic) that you'd have some installment utilization swing, which shouldn't be the case if just going from 33 to 38 aggregate; I have pretty conclusive data it's simply aggregate and not individual (as I did not get a bump after I moved the small one <10% and only got the boost when the second reported paid down likewise to <10%) but I don't know anyone else who's tested with multiple lines at varying different ratios. Also I lost the precise absolute value of points that I'd gained previously when I got my mortgage, which is further evidence that it's just aggregate even with two small loans <10%.
It'd be interesting to see if there's a youngest account penalty, I've never gotten above 2 years on my newest account and as a result I've never found a breakpoint... all my drops on new tradelines have been explicitly matched with AAOA changes.