Wow big drop

[increasingmyfico]

 I paid off an installment loan and lost a whopping 22 points. I know there is a penalty for having no installment loans, but I have an auto loan, student loans and another installment loan. Having others other why would closing one be such a hard hit? Definitely demoralizing to say the least. 

[GZG]

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@increasingmyfico wrote:

 I paid off an installment loan and lost a whopping 22 points. I know there is a penalty for having no installment loans, but I have an auto loan, student loans and another installment loan. Having others other why would closing one be such a hard hit? Definitely demoralizing to say the least. 

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What are the amounts and percentage paid of those other loans? 

Perhaps you lost points from the percentage of your total loan amount paid off vs. owed and lost points for losing a loan that's almost paid off completely.

something, something, finances over fico, Congrats on getting the loan paid off despite the score drop. 

[increasingmyfico]

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@GZG wrote:

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@increasingmyfico wrote:

 I paid off an installment loan and lost a whopping 22 points. I know there is a penalty for having no installment loans, but I have an auto loan, student loans and another installment loan. Having others other why would closing one be such a hard hit? Definitely demoralizing to say the least. 

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What are the amounts and percentage paid of those other loans? 

Perhaps you lost points from the percentage of your total loan amount paid off vs. owed and lost points for losing a loan that's almost paid off completely.

something, something, finances over fico, Congrats on getting the loan paid off despite the score drop. 

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      90+ on the others... double whammy hit... Fico wins again 

[mortimerwereback]

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@increasingmyfico wrote:

 I paid off an installment loan and lost a whopping 22 points. I know there is a penalty for having no installment loans, but I have an auto loan, student loans and another installment loan. Having others other why would closing one be such a hard hit? Definitely demoralizing to say the least. 

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Totally feel ya. To work so hard for each +3, +2 , +4 and then to drop 22 points is a kick in the ____. And I agree... with your auto loan and student loans reporting, I'm curious what lead to such a large point drop. It also happened to me when I'd forgotten about AZEO and paid off all my cards one month. I took at least a 17-20 point hit across each bureau. Needless to say, I was pretty livid. I'm almost paranoid to pay off my Shared Secured Loan from Navy Fed for this reason. I'll probably take out another one as my large one gets closer to being paid. I'd rather do that while getting my scores into the mid 700s than watching them drop from 705 back to 687 or something. lol...

Anyhow... the scores do recover. Best of luck!

[SouthJamaica]

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@increasingmyfico wrote:

 I paid off an installment loan and lost a whopping 22 points. I know there is a penalty for having no installment loans, but I have an auto loan, student loans and another installment loan. Having others other why would closing one be such a hard hit? Definitely demoralizing to say the least. 

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That would occur, in your FICO 8's and 9's, if your aggregate installment utilization percentage increased from below 10% to above 10%.  If that's not the case, then I have no explanation for it. If that is the case, you can take comfort in the facts that (a) your mortgage scores probably didn't react at all, or reacted much less strongly, and (b) these are points you will eventually get back.

[805orbust]

That would especially make sense if it was your oldest account as well. Along with the advanced aging, it would also have the lower loan-to-balance ratio, which the algorithm loves.

[SouthJamaica]

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@805orbust wrote:

That would especially make sense if it was your oldest account as well. Along with the advanced aging, it would also have the lower loan-to-balance ratio, which the algorithm loves.

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Paying off the loan would not affect the aging. It continues to be factored into the aging factors as long as it continues to be reflected in the reports, which is usually for many years down the road.

[dunn2500]

its such a friggen game....we want you to be in debt, but not too much, a little bit, no thats much, no thats too little, no too much again, dont pay off the loan, take out another etc, etc......lol

got to the point where i said screw it......only reason i came back is i got hacked so just watching and monitoring.....as far as playing their little game i dont care.....I pay my bills and let them do whatever they want

i read about some guy who took out a 5 yr loan on vehicle and paid it all off cept for small chunk......he paid $1-2 a month for remainder of the loan to get the benefit of scoring algorithms, lol

[Revelate]

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@SouthJamaica wrote:

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@increasingmyfico wrote:

 I paid off an installment loan and lost a whopping 22 points. I know there is a penalty for having no installment loans, but I have an auto loan, student loans and another installment loan. Having others other why would closing one be such a hard hit? Definitely demoralizing to say the least. 

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That would occur, in your FICO 8's and 9's, if your aggregate installment utilization percentage increased from below 10% to above 10%.  If that's not the case, then I have no explanation for it. If that is the case, you can take comfort in the facts that (a) your mortgage scores probably didn't react at all, or reacted much less strongly, and (b) these are points you will eventually get back.

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I think we can probably add FICO 10 to the list.  I see complaints about Loan Utilization there too.  AFAIK that's the only thing holding me back on 850 at some level not that it truly matters.  Ain't paying off that 3.15% mortgage any quicker than I have to when I probably am going to get one around 7% in a few months.  

That 7% one though, all available free cash go!