@Revelate wrote:
@TRC_WA wrote:
@Revelate wrote:Vehicle loans unfortunately are apparently muy bueno under FICO 8; I took an 18 point drop when my auto loan closed and I had other installment loans though they're reporting as OTHER on Equifax. Not certain that makes a difference or not. My score hasn't recovered even with several card balances paid off and held constant, so I'm assuming the drop from 708 to 690 was explicitly the car loan being paid.
Not happy but that's the breaks I guess. My Beacon 5.0 didn't budge an inch, so I think FICO 8 might be counting stuff a little differently at least on Equifax.
I'll let you know what happens when my trade in reports as paid and my new auto loan hits the CR...
Actually I'm really looking forward to seeing that information! I don't think it mattered under earlier versions but we've always theorized there were different strata of installment loans and this may be pretty good proof of that.
I will definitely let you know!
On a side note, I had a 5k Lending Club personal loan hit my reports last week... TU went up 3 points... EQ and EX didn't move. TU seems a bit weird... I gain points with reasons being "your total retail CC balance has decreased" but I never see reasons like that from EQ and EX.
The Lending Club loan reports as installment and I also have 5 Sallie Mae turned Navient student loans in addition to the new/old car loans that are about to be added/updated.
@Revelate wrote:Vehicle loans unfortunately are apparently muy bueno under FICO 8; I took an 18 point drop when my auto loan closed and I had other installment loans though they're reporting as OTHER on Equifax. Not certain that makes a difference or not. My score hasn't recovered even with several card balances paid off and held constant, so I'm assuming the drop from 708 to 690 was explicitly the car loan being paid.
Not happy but that's the breaks I guess. My Beacon 5.0 didn't budge an inch, so I think FICO 8 might be counting stuff a little differently at least on Equifax.
Confirm your findings! Also, add that I paid off one mortgage and it took my score down -25 points too. What the ... ! Once I acquired another mortgage (not for the purposes of keeping FICO Scores happy) my scores went back up. Not feeling this new FICO 08. Do better under the old FICO 04. My AAoA and oldest accounts are dragging me yet, I have a thick credit file that is clean. As to Equifax and Beacon Scores any edition ... I do worse so go figure. After all the dust settled I purchased a different vehicle and my scores sit in the low 800's with comments from the FAKO Score providers of too much debt outstanding on the mortgage and installment loan. Suspect the comments coupled with account ages is dragging me down for FICO 08 Scores. The "game" of credit is just that. Does it really matter? Only if I needed more credit which I don't 
@TRC_WA wrote:
@Revelate wrote:
@TRC_WA wrote:
@Revelate wrote:Vehicle loans unfortunately are apparently muy bueno under FICO 8; I took an 18 point drop when my auto loan closed and I had other installment loans though they're reporting as OTHER on Equifax. Not certain that makes a difference or not. My score hasn't recovered even with several card balances paid off and held constant, so I'm assuming the drop from 708 to 690 was explicitly the car loan being paid.
Not happy but that's the breaks I guess. My Beacon 5.0 didn't budge an inch, so I think FICO 8 might be counting stuff a little differently at least on Equifax.
I'll let you know what happens when my trade in reports as paid and my new auto loan hits the CR...
Actually I'm really looking forward to seeing that information! I don't think it mattered under earlier versions but we've always theorized there were different strata of installment loans and this may be pretty good proof of that.
I will definitely let you know!
On a side note, I had a 5k Lending Club personal loan hit my reports last week... TU went up 3 points... EQ and EX didn't move. TU seems a bit weird... I gain points with reasons being "your total retail CC balance has decreased" but I never see reasons like that from EQ and EX.
The Lending Club loan reports as installment and I also have 5 Sallie Mae turned Navient student loans in addition to the new/old car loans that are about to be added/updated.
All the reasons are individual to the bureau when we're talking about the monitoring solution: it's OEM from all three bureaus, and different applications for each of them so there's not a lot of consistency in the messaging as they label balance changes in 3 different ways when I last looked. The scores changes are really the standard on that.
To add to the data -
09/26/14 - EQ FICO 04 = 671
10/02/14 - EQ FICO 8 = 702
10/02/15 - EQ FICO 8 = 684 (auto loan closure, loss of 18)
10/31/14 - EQ FICO 04 = 671
Least it didn't affect the score that's used on a mortgage otherwise I would've been REALLY irritated given everyone has a tier at 680 and a corresponding 18ish point would've put me well under that. Equifax has always been my lowest score regardless of model used, so am hoping that with my 683 possibly 685 max (once I get one more balance reporting zero in early Feb) will wind up having both my TU/EX scores above that mark too. 700 is a pipedream for me on a mortgage score haha.
@Anonymous wrote:Just for data point purposes, i had an alliant cu 500 share secured loan start reporting, and got an eq bump of 30 pts (clean report, short history) 24 pts ex (1 7 yr old paid collection short file). Has not hit tu yet. I have a share secured loan with my other cu, but it reports strangely (shows under revolving) so those instsllment loans seem to make a big difference for thin files for sure.
Yeah I think most of us are in agreement that having at least one installment loan reporting is a good thing but I had a reporting Alliant CU secured loan and a pair of similar USAA secured loans when I took the hit on the auto loan closure... which suggests to me that they're not equivalent from a scoring perspective under FICO 8. Installment loan good, auto loan better, and possibly mortgage even better than that. That's been stated similarly previously by a number of different people including some people who are theoretically in the know, but I'd never seen any data that really demonstrates it in such a clear fashion as my older FICO scores didn't behave like that.
Assuming I get this new gig, in which case I'm going to be getting a mortgage as soon as I can wrap my arms around two paystubs, it'll be interesting to see if I get a bump as I won't take a AAOA hit on this one and I have a number of inquiries already so any additional damage there from the mortgage application should be minimal.
@jamie123 wrote:I'm kinda refining my installment loan strategy and perhaps how I advise people about installment loans.
1. Everyone should have installment loan history on their reports. If you don't have an installment loan on your reports, you need to open at least one and maybe two share secured loans with a CU like Alliant or SDFCU. This is especially needed for someone that is new to credit or has a thin file. The open installment loan will boost their FICO 08 scores after a few months which would qualify them for better CCs earlier in their credit building process.
2. I don't feel that once your credit is established and that you have at least one closed installment loan on your reports and have all the credit cards that you need, that you need an open installment loan. From reading these forums it appears that an open installment loan only affects the FICO 08 score. When applying for an auto loan or mortgage the lenders will be pulling FICO 04 and FICO auto enhanced scores that don't seem to be affected by having an OPEN installment loan.
So it boils down to:
- Looking to boost scores for the next shiny new credit card = open installment loan.
- Looking for an auto loan or mortgage and have a closed installment loan on your reports = open installment loan not needed.
I don't think you can include Auto Enhanced in as being known whether open installment lines help or not; I suspect that they very much do on FICO 8 Auto Enhanced as typically industry options just change the weighting of tradelines, and presumably the base underlying assumption that open accounts are more predictive than closed ones that FICO 8 appears to have would hold in all industry options.
Agreed that for current mortgage markets it might be mostly moot, but I think most of the testers have an open installment loan anyway; we have had numerous reports of drops when installment loans closed for FICO '04 when Scorewatch was still on the Beacon 5.0 model, but they were nowhere near as substantial as the significant drops we've seen in FICO 8 for them.
I don't think I'll be changing my own personal advice that you should have an open installment loan regardless: the costs for doing so are so trivial anyway, comparable to checking a report / score, vs. the money that we waste all the time anyway. I spend more taking a date out to a comparitively cheap restaurant than I would for the interest paid on the entirety of my 5 year Alliant secured loan... need to keep the costs in perspective.
Maybe should have two reporting as the old data found, I still had 3 open when my auto loan closed and my Beacon 5.0 (a mortgage score) didn't move one iota. May not matter in all cases, but in my case where I'm a hairsbreadth away from falling down to a much worse mortgage tier, 2-3 points absolutely matters.