do you have ONLY a student loan or a mortgage?

[Anonymous]

A number of us have been trying to figure out whether student loans or mortgages are scored differently from others kinds of installment loans. 

If you have open student loans, but no other kinds of open installment loans, you could help us out a huge amount.  Likewise if you have an open mortgage, but you have no other kinds of installment loans.  Just so I am 100% clear:

Student loans only:

At least one open student loan, but no open mortgage, personal loan, auto loan, finance company account, etc.

Mortgage only:

At least one open mortgage, but no open student loan, personal loan, auto loan, finance company account, etc.

If this applies to you, you could help us a ton by open a small personal loan, called a "share secure loan."  There will be no hard pull.  We can give you step by step guidance on how to do it.  Here is a link that explains the idea.  You only need to read the first few posts:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

Incidentally, there's a chance you'd be helping yourself a lot too.  It's possible that by conducting this experiment that you would raise your credit score quite a bit.  Up till now, we had thought that a person with an open mortgage or an open student loan could not benefit from this technique.  We are still probably right, but there's a chance that the technique might help the two groups I spelled out above.  If so, we'd like to know.

If you belong to either of these two groups, and you wish to help, please do the following.

Post on this thread.  Indicate in a single post all your open loan loans.  For each loan, describe two things: the amount you currently owe and the original amount that the loan was for.  Use this format.

Loan 1.  Loan type = ________.  Current balance = ______.  Original Amount = _______

Loan 2.  Loan type = ________.  Current balance = ______.  Original Amount = _______

Loan 3.  Loan type = ________.  Current balance = ______.  Original Amount = _______

For loan type write Student Loan or Mortgage.  Remember you need to have ONLY student loans or ONLY mortgages -- no other installment loans.

Part of being in this experiment means a willingness to get your reports in good shape for the test first.  Otherwise your test resulkt won't mean anything.

This means:

Getting your credit card data stable.  You'll want to have the same number of cards reporting a $0 balance both before and after the test.  You'll also want to have the same total CC utilization before and after the test.  You'll also want to have all your cards reporting at < 49% individual U during the test.

Knowing what your AAoA is.  You'll want to avoid your AAoA crossing over into a new integer number during the test.

Knowing whether you have any inquiries close to one year old.  You want to avoid any inquiries crossing the 365 day mark during the test.

Knowing your derogs.  You want to know about anything weird that could cause your score to change here.  Like a derog falling off, or a late crossing over 1 year or 2 years old, etc. 

Including a description of this prior to test would be essential. 

Then a simple way to do the test would be to use the $1 free trial and Credit Check Total, as your tool for pulling your scores before and after.

Let me know if anyone thinks he or she would like to help!

[iheartwings]

Great experiment!

I guess I had always assumed that mortgage was considered separate from other installment loans (i.e., To maximize your scores you needed all three - revolver, installment, and mortgage. Under that assumption, I would think that the SSL loan would then be helpful.) From my other thread, we're wondering if student loans fit under that "yes-it's-an-installment-but-not-the-same-as-other-loans" category. 

As you know, I'm committed to gardening currently, but I will likely go for the SSL if I don't recover points after hitting some thresholds on my student loan utilization in the next 6 months. 

I'll be curious to see what happens when members of the collective try this.  

[Anonymous]

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@iheartwings wrote:

I'll be curious to see what happens when members of the collective try this.  

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We are the Borg.  Resistance is futile.

[iheartwings]

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@Anonymous wrote:

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@iheartwings wrote:

I'll be curious to see what happens when members of the collective try this.  

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We are the Borg.  Resistance is futile.

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Don't you know it.

[Thomas_Thumb]

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@iheartwings wrote:

Great experiment!

I guess I had always assumed that mortgage was considered separate from other installment loans (i.e., To maximize your scores you needed all three - revolver, installment, and mortgage. Under that assumption, I would think that the SSL loan would then be helpful.) From my other thread, we're wondering if student loans fit under that "yes-it's-an-installment-but-not-the-same-as-other-loans" category. 

As you know, I'm committed to gardening currently, but I will likely go for the SSL if I don't recover points after hitting some thresholds on my student loan utilization in the next 6 months. 

I'll be curious to see what happens when members of the collective try this.  

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I believe mortgages are looked at differently thanother installment loans (with respect to B/L ratio). However, you don't need more than one type of open installment loan to maximize Fico 08 score.

[Revelate]

Will just state that when my mortgage reported, my pretty installment utilization apparently went to crap as I took an almost exact magnitude drop as I'd gotten on the upswing on the original testing.  File was somewhat different at the time and it was seriously busy so I didn't really try to isolate as it was pretty obvious what had happened at the time but might've missed something.  I'm 100% confident I could pay off my two baby loans and nothing would come of it, I may close out the USAA one anyway as that money is useless in a CD currently.

Mortgage B/L's might be different to TT's point, and I'm also starting to wonder if there might be some differences between the bureaus but it's more likely my HELOC is reported and calculated slighly differently on all three even if the 3 bureaus all appear to consider it installment (or at least they certainly don't factor it into number of revolving tradelines with balances which is a pretty clear indiciator in my book).  Will see, it's easy enough for me to shuffle money out of the HELOC and then back with how DCU's interface works so I can play with the threshold a bit without a major long term financial penalty if there is something at 90% on EX for me.

SL's were always more questionable: there was a long time F+I guy (dealership finance in the auto world) who noted that out of the thousands of auto enhanced scores he'd looked at over the years for auto loans that the "first time buyer" penalty of not having an installment loan wasn't present with a mortgage / auto / personal loan on the report, but was there if had SL's but no other installment type, similar to revolver only files.  Very anecdotal to be sure, but given the ability to look at tons of credit reports it seemed at least credible.

[Anonymous]

To follow-up on what Revelate is saying, contributor iHeartWings (who comments in this thread too) currently has a high utilization student loan.  She also had an auto lease with an ultralow U.  Together her overall installment util was very high (> 91%) since the student loans were so huge.  When she paid the auto lease off, however, she took a substantial hit -- harder to explain if student loans and the auto lease are all scored as part of one aggregate lump, but easy to explain if they are scored as very different animals.

ILW isn't in a place where she can easily test this right now but her case reminded me of why it is worth looking into.  Young people who graduate from school with no installment loans except for their SLs are quite common -- it would be great to get confirmation from multiple people that the SS loan technique benefits them a lot even though their SL balances are quite high.  If we can get this, I will change the SSL guidance accordingly.

[dls80]

I may be up for it. I have a SL and I do not have a mortgage. However, just last month I opened a CC. Will that have an impact on my score over the next few months as well?

[Anonymous]

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@dls80 wrote:
I may be up for it. I have a SL and I do not have a mortgage. However, just last month I opened a CC. Will that have an impact on my score over the next few months as well?

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The new CC may very well have an impact on your score in the next few months.  A few questions:

*  Do you have tools for pulling your reports frequently?  If not, Credit Karma would be good for you.  It is free and gives you the abillity to pull new updated EQ and TU reports as often as once a week.

*  Has the new CC begun appearing on your reports?

*  Is this new CC your first CC? 

*  When you say that you do have a student loan but do not have a mortgage, can you confirm that you have no other installment loans of any kind?  No personal loans, no auto loans, no finance company accounts?  (The latter is where, for example, you buy a bedroom set at Rooms To Go, or a washer dryer at Best Buy, and they offer you a special financing deal, where you don't have to pay anything up front.)

*  Counting all your student loans together...

            How much do you currently owe?

            What was the total original amount of the loans?

*  How many accounts total do you have on your report?  (Closed and open together.)

I am so delighted that you might be willing to help us out with this.  Look forward to hearing from you soon!