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Will My FICO Score Go Up?

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Established Member

Will My FICO Score Go Up?

I owe one bank card and two retail cards. I applied for a unsecured loan and have cash to pay off ALL revolving debt. Do you think my FICO score will go up or initially go down because of the new unsecured loan? Just curious. I will save interest by going the loan vs. credit card debt.

4 REPLIES 4
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Frequent Contributor

Re: Will My FICO Score Go Up?

Mix of both

You score will drop slightly because of
1. New inquiry
2 new account
3 drop in average age of accounts

But. When your Util goes to zero, you will get an increase.

So it will be a busy month(s) for your scoring
July 31/2019. EX-712. EQ-704. TU-726
Oct 25 2019. EX-715 EQ-712 TU-734
Dec 16/2019. EX. 721. EQ. 723. TU 746
Jan 17/2020 EX. 725. EQ. 720. TU 748
Feb 16\2020 EX. 726 EQ. 729 TU 752
Message 2 of 5
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Moderator Emeritus

Re: Will My FICO Score Go Up?

Just remember to report a small balance on one of your cards; all zeros is a penalty still on every relevant scoring model.

Generally speaking, if your revolving utilization (on your credit cards, both bank and retail) was non-trivial you will likely get a reasonable bump on your scores. The fact you are applying for the loan at all suggests you had some non-trivial debt there but end of the day saving money by lowering interest on debt is more important than short-term FICO scoring.



        
Message 3 of 5
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New Contributor

Re: Will My FICO Score Go Up?


@JBarr1 wrote:

I owe one bank card and two retail cards. I applied for a unsecured loan and have cash to pay off ALL revolving debt. Do you think my FICO score will go up or initially go down because of the new unsecured loan? Just curious. I will save interest by going the loan vs. credit card debt.


You could be into a decent point boost due to the fact if your utilization individual or aggregate is currently high and you greatly lower it.

Utilization levels are worth 30% of your score second only to payment history at 35%.

 

Also if you did not have an open installment already you will get points from improving your credit mix with the addition of your loan.

 

The New credit/New Inquiry credit age effects are much less impactful and any points loss generally rebound in 3-6 months.

 

 

Message 4 of 5
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Senior Contributor

Re: Will My FICO Score Go Up?

It depends.

#1 Is this your first loan? If so, you'll earn points for credit mix. If you have an open or closed loan on record, you will not get those points again.

#2 Installment inquiry will hit 30 days after pulled. Without knowing what scorecard you are on, its hard to say how many points lost, anywhere from 0-17.

#3 Will the new account cause you to cross an AAoA threshold? If so, loss of 3 points or so.

#4 what is your revolving util now, and what will it be? The reduction will give you points. As stated above, leave a small balance on a national bankcard, not retail.

No AoYA reset for loans, no loss there.

Your net loss/gain is the sum of these and you haven't given us specifics to even guess with, but now you have an idea how it works.










(Forgive typos, mobile.)(Everything said is Just IMHO.)
Scores updated DEC'19.

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? (clean/dirty), Number of accounts open and closed on CRs (thick/thin), AoOA? (aged/nonaged), AoYR-Age of Youngest Revolver (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/aged/new accounts, with open loan on record.
If you don't know where you fall, just list whether you have any baddies, your number of open and closed accounts, AoOA, AoYR and whether you have a loan on record.
For utilization questions, list individual and aggregate utilizations, revolving and installment. please.
Message 5 of 5
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