cancel
Showing results for 
Search instead for 
Did you mean: 

should an installment auto loan cause a drop?

tag
JcT21
Frequent Contributor

should an installment auto loan cause a drop?

for several months, according to fico,  one of the key things holding down my score was lack of an installment loan on my reports.   well, my new auto loan reported today and i thought that would give me a boost, but it dropped me 13 points on experian.  it hasnt reflected on TU & EQ yet but i expect about the same on those.

 

if fico wanted to see an installment loan, why knock me 13 points for it?  is that common?    

 

my utilization prior to the auto loan is at 2%. i do azeo.   perhaps it is normal but it sure is depressing.  

 

 

fico scores - March 2024:
TU - 727 | EX - 732 | EQ - 736 |
TCL - 168K - UTIL - less than 1%
Message 1 of 5
4 REPLIES 4
SouthJamaica
Mega Contributor

Re: should an installment auto loan cause a drop?


@JcT21 wrote:

for several months, according to fico,  one of the key things holding down my score was lack of an installment loan on my reports.   well, my new auto loan reported today and i thought that would give me a boost, but it dropped me 13 points on experian.  it hasnt reflected on TU & EQ yet but i expect about the same on those.

 

if fico wanted to see an installment loan, why knock me 13 points for it?  is that common?    

 

my utilization prior to the auto loan is at 2%. i do azeo.   perhaps it is normal but it sure is depressing.  

 

 


Yes absolutely. 

 

The good news is that (a) you might not lose as much in the mortgage scores, and (b) once you get the loan paid down below 10% of the original amount, you'll get a good score boost in your FICO 8's and 9's.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 2 of 5
sznthescore
Established Contributor

Re: should an installment auto loan cause a drop?

It's the new account penalty. Give it some time (6 months or so) as you repay the loan your scores will bounce back. 

REBUILDER CARDS




Goal: FICO 700+
Message 3 of 5
coldfusion
Community Leader
Mega Contributor

Re: should an installment auto loan cause a drop?

You have a new loan which is reporting at 100% utilization, hence the ding.   The good news is that your scores should start to recover nicely within a few months.  [side note - when my current auto loan first reported my FICO 8 scores all dropped between 30-35 points, I recovered them all and more within a year]

 

 

 

(3/2024)
FICO 8 (EX) 846 (TU) 850 (EQ) 850
FICO 9 (EX) 850 (TU) 850 (EQ) 850

$1M+ club

Artist formerly known as the_old_curmudgeon who was formerly known as coldfusion
Message 4 of 5
OmarGB9
Community Leader
Super Contributor

Re: should an installment auto loan cause a drop?

To add on to what has been said, AZEO applies to revolving accounts only. Installment loans have separate utilization and your 2% utilization as well as AZEO don't apply.


Last App: 1/10/2023
Penfed Gold Visa Card

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 5 of 5
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.