Hello all, I want to start a thread here to discuss a fairly uncommon situation with my own credit file in the hopes that some here can shed some light on the metrics and scoring effects involved, and that we can all learn from the DPs my situation will provide over the next few months regarding Installment Loan Charge Offs. Background: In 2019, I hit a particularly rough patch in my financial life which resulted in me defaulting on several credit cards resulting in both revolving COs and CAs. In the course of this, I made things worse by taking out 2 pretty awful, predatory installment loans which I also ended up defaulting on. From the very beginning in 2019 (until very recently), these 2 installment loans have been reporting to TU and EQ only. The 2 loans are both now COs, and have been reporting monthly to both TU and EQ with balances. Installment Loan Specifics on My Credit File: Lending Club - Original loan amount: $15K; Current balance: $501; Pays as agreed, never late. Has been reported on all 3 CRAs since the beginning of the loan Regional Finance - Original loan amount: $5K; Current balance: $8150; Charged Off; Had been reporting monthly to only TU and EQ until 2 days ago when it very unexpectedly slammed into my EX Continental Credit (Security Finance) - Original loan amount: $1100; Current balance: $1700; Charged Off; Reporting monthly to TU and EQ only Now, I began my rebuild in June 2021, and with some great advice from Birdman and some really great luck, I was able to have all my revolving COs paid/settled reporting $0 balances, and all my CAs agreed to PFD. When the dust settled on this my FICOs stood here: EX FICO 8: 701 - All revolving COs paid with $0 balances; Installment COs not reporting at all TU FICO 8: 674 - All revolving COs paid with $0 balances; Installment COs reporting monthly with balances EQ FICO 8: 660 - All revolving COs paid with $0 balances; Installment COs reporting monthly with balances So, although I know each CRA has a slightly different algo, I could deduce from my own scores that these 2 really nasty Installment Loan COs with balances being reported monthly to only 2 bureaus were costing me between 35-40 points. This led Birdman and I to the discussion of if the balances of the installment COs were being factored into utilization metrics the way we know revolving COs (reported within 24 months) do. It sure seemed like I would be seeing a bigger score loss on the 2 reports that contained the COs if utilization was being affected as well. Fast forward a month or so, and I crossed the under 9% scoring threshold on my open and pays as agreed Lending Club loan, and I saw a small score increase on all 3 CRAs. There's no possible way I crossed a scoring threshold on TU and EQ if the installment COs were indeed being factored into utilization metrics, so we agreed it was possible the balances were in fact not being factored into utilization. Fast forward again to yesterday. The larger of the 2 COs slammed into my EX report which still had baddies but all were resolved, and my FICO 8 plummeted from 703 to 637. Now, this CO is being reported monthly to both TU and EQ, and my FICO 8s sit today at 671 and 669 respectively, yet the CO hitting EX tanked my EX FICO 8 to 637. This is a pretty large disparity when the CO is technically no 'newer' on my EX than it is on my TU or EQ even though it was just recently reported to EX. The monthly reporting to TU and EQ keeps it just as 'fresh' on them as it is on EX now. It's very strange indeed. So, I have already reached a settlement agreement and paid the smaller installment CO, and I'm just waiting for it to report to TU and EQ as settled with a $0 balance, and I'll be watching closely to see if I see a score increase when the balance reports $0. In the next few weeks, I will also be attempting to resolve the last baddie...that terrible $8K CO as well, and will document scoring changes from that one as well. In the meantime, I would love to hear everyone's thoughts and experiences with installment COs. Do they affect scoring through utilization on top of the CO status? Am I looking at an immediate score rebound of some kind when the balances both report $0? Why would the disparity from TU and EQ vs EX be so large? Fire away with your thoughts and knowledge please.
Post

Installment Loan COs, DPs, Scoring, and Discussion

1 of 11
3 years ago
Fri Oct 15, 2021 5:07 am
User avatar
SoonerSoldier33
Seasoned RebelTeam Cash Back
Level9 Last INQMonday, November 27, 2023 Gardening For9 months, 20 days, 13 hours, and 35 minutes Next Level in10 days, 10 hours, and 25 minutes on September 27th INQ 1yr onWednesday, November 27, 2024 INQ 1yr in2 months, 10 days, 10 hours, and 25 minutes INQ 2yr onThursday, November 27, 2025 INQ 2yr in1 year, 2 months, 10 days, 10 hours, and 25 minutes Goal24 months Goal DateThursday, November 27, 2025 Goal In1 year, 2 months, 10 days, 10 hours, and 25 minutes
Hello all, I want to start a thread here to discuss a fairly uncommon situation with my own credit file in the hopes that some here can shed some light on the metrics and scoring effects involved, and that we can all learn from the DPs my situation will provide over the next few months regarding Installment Loan Charge Offs. Background: In 2019, I hit a particularly rough patch in my financial life which resulted in me defaulting on several credit cards resulting in both revolving COs and CAs. In the course of this, I made things worse by taking out 2 pretty awful, predatory installment loans which I also ended up defaulting on. From the very beginning in 2019 (until very recently), these 2 installment loans have been reporting to TU and EQ only. The 2 loans are both now COs, and have been reporting monthly to both TU and EQ with balances. Installment Loan Specifics on My Credit File: Lending Club - Original loan amount: $15K; Current balance: $501; Pays as agreed, never late. Has been reported on all 3 CRAs since the beginning of the loan Regional Finance - Original loan amount: $5K; Current balance: $8150; Charged Off; Had been reporting monthly to only TU and EQ until 2 days ago when it very unexpectedly slammed into my EX Continental Credit (Security Finance) - Original loan amount: $1100; Current balance: $1700; Charged Off; Reporting monthly to TU and EQ only Now, I began my rebuild in June 2021, and with some great advice from @Birdman and some really great luck, I was able to have all my revolving COs paid/settled reporting $0 balances, and all my CAs agreed to PFD. When the dust settled on this my FICOs stood here: EX FICO 8: 701 - All revolving COs paid with $0 balances; Installment COs not reporting at all TU FICO 8: 674 - All revolving COs paid with $0 balances; Installment COs reporting monthly with balances EQ FICO 8: 660 - All revolving COs paid with $0 balances; Installment COs reporting monthly with balances So, although I know each CRA has a slightly different algo, I could deduce from my own scores that these 2 really nasty Installment Loan COs with balances being reported monthly to only 2 bureaus were costing me between 35-40 points. This led @Birdman and I to the discussion of if the balances of the installment COs were being factored into utilization metrics the way we know revolving COs (reported within 24 months) do. It sure seemed like I would be seeing a bigger score loss on the 2 reports that contained the COs if utilization was being affected as well. Fast forward a month or so, and I crossed the under 9% scoring threshold on my open and pays as agreed Lending Club loan, and I saw a small score increase on all 3 CRAs. There's no possible way I crossed a scoring threshold on TU and EQ if the installment COs were indeed being factored into utilization metrics, so we agreed it was possible the balances were in fact not being factored into utilization. Fast forward again to yesterday. The larger of the 2 COs slammed into my EX report which still had baddies but all were resolved, and my FICO 8 plummeted from 703 to 637. Now, this CO is being reported monthly to both TU and EQ, and my FICO 8s sit today at 671 and 669 respectively, yet the CO hitting EX tanked my EX FICO 8 to 637. This is a pretty large disparity when the CO is technically no 'newer' on my EX than it is on my TU or EQ even though it was just recently reported to EX. The monthly reporting to TU and EQ keeps it just as 'fresh' on them as it is on EX now. It's very strange indeed. So, I have already reached a settlement agreement and paid the smaller installment CO, and I'm just waiting for it to report to TU and EQ as settled with a $0 balance, and I'll be watching closely to see if I see a score increase when the balance reports $0. In the next few weeks, I will also be attempting to resolve the last baddie...that terrible $8K CO as well, and will document scoring changes from that one as well. In the meantime, I would love to hear everyone's thoughts and experiences with installment COs. Do they affect scoring through utilization on top of the CO status? Am I looking at an immediate score rebound of some kind when the balances both report $0? Why would the disparity from TU and EQ vs EX be so large? Fire away with your thoughts and knowledge please.
SoonerSoldier33
User avatar
Seasoned Rebel
  • Score data TU FICO 8: 641 EQ FICO 8: 616 EX FICO 8: 649
1
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

2 of 11
3 years ago
Fri Oct 15, 2021 5:37 am
User avatar
Birdman
Primer AuthorCo-Founder
Birdman has been gardening for over 2 years.
Level30 Last INQWednesday, March 2, 2022 Gardening For2 years, 6 months, 14 days, 13 hours, and 35 minutes Next Level in15 days, 10 hours, and 25 minutes on October 2nd INQ 1yr onThursday, March 2, 2023 INQ 1yr reached1 year, 6 months, 14 days, 13 hours, and 35 minutes ago INQ 2yr onSaturday, March 2, 2024 INQ 2yr reached6 months, 14 days, 13 hours, and 35 minutes ago
We can’t forget about the payment history category’s amount owed on delinquent accounts Metric that may or may not come in to play.
Birdman
User avatar
Primer Author
  • Score data EQ8-827; TU8-817; EX8-816
    EQ5-751; TI4- 800; EX2-814
1
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

3 of 11
3 years ago
Wed Dec 22, 2021 2:23 pm
User avatar
SoonerSoldier33
Seasoned RebelTeam Cash Back
Level9 Last INQMonday, November 27, 2023 Gardening For9 months, 20 days, 13 hours, and 35 minutes Next Level in10 days, 10 hours, and 25 minutes on September 27th INQ 1yr onWednesday, November 27, 2024 INQ 1yr in2 months, 10 days, 10 hours, and 25 minutes INQ 2yr onThursday, November 27, 2025 INQ 2yr in1 year, 2 months, 10 days, 10 hours, and 25 minutes Goal24 months Goal DateThursday, November 27, 2025 Goal In1 year, 2 months, 10 days, 10 hours, and 25 minutes
Birdman wrote: ↑Fri Oct 15, 2021 5:37 am We can’t forget about the payment history category’s amount owed on delinquent accounts Metric that may or may not come in to play.
I now have some DPs to support the 'theory' that, while installment CO balances do not seem to affect installment utilization, they do affect scoring by another metric...'amount past due'...at least on TU and EQ. Attached are my most recent scores and reason codes. Both TU and EQ show 'amount past due' as a negative reason code. So, this leads me to believe that the balance of the installment CO is negatively affecting these scores in addition to the negative effects of the CO itself. I hope to settle my last remaining installment CO balance soon, and will update any score improvements when I do and it reports.
Screenshot_20211219-203923_myFICO.jpg 160.77 KiB Viewed 108 times
Screenshot_20211219-203908_myFICO.jpg 159.04 KiB Viewed 108 times
Screenshot_20211213-232312_myFICO.jpg 161.57 KiB Viewed 108 times
SoonerSoldier33
User avatar
Seasoned Rebel
  • Score data TU FICO 8: 641 EQ FICO 8: 616 EX FICO 8: 649
0
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

4 of 11
3 years ago
Wed Dec 22, 2021 4:02 pm
User avatar
Birdman
Primer AuthorCo-Founder
Birdman has been gardening for over 2 years.
Level30 Last INQWednesday, March 2, 2022 Gardening For2 years, 6 months, 14 days, 13 hours, and 35 minutes Next Level in15 days, 10 hours, and 25 minutes on October 2nd INQ 1yr onThursday, March 2, 2023 INQ 1yr reached1 year, 6 months, 14 days, 13 hours, and 35 minutes ago INQ 2yr onSaturday, March 2, 2024 INQ 2yr reached6 months, 14 days, 13 hours, and 35 minutes ago
@SoonerSoldier33 well done Rebel! I think that does confirm that installment Balances in chargeoff status are taken into account by that scoring factor! It is still a conundrum how to isolate the two with revolving chargeoffs. And as I was re-reading your initial post, when you crossed that 9% line, it was conflated that’s why it was only a small change correct? Forgive me but my memory and concentration is not what it should be yet. No you’re in a dirty card so that’s why it was small right? And very good to see you I’m sorry we haven’t talked in a while but I took a break and was having some medical issues hope you’re doing well! I now favor the theory installment chargeoffs are not accounted for in installment Utilization. And it’s not surprising because in current algorithms revolving activity has always been given focus and precedence over installment activity.
Birdman
User avatar
Primer Author
  • Score data EQ8-827; TU8-817; EX8-816
    EQ5-751; TI4- 800; EX2-814
0
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

5 of 11
3 years ago
Wed Dec 22, 2021 4:23 pm
User avatar
SoonerSoldier33
Seasoned RebelTeam Cash Back
Level9 Last INQMonday, November 27, 2023 Gardening For9 months, 20 days, 13 hours, and 35 minutes Next Level in10 days, 10 hours, and 25 minutes on September 27th INQ 1yr onWednesday, November 27, 2024 INQ 1yr in2 months, 10 days, 10 hours, and 25 minutes INQ 2yr onThursday, November 27, 2025 INQ 2yr in1 year, 2 months, 10 days, 10 hours, and 25 minutes Goal24 months Goal DateThursday, November 27, 2025 Goal In1 year, 2 months, 10 days, 10 hours, and 25 minutes
I believe the small increase I saw when my previous installment loan went under 9% was minimized by my dirty scorecard, but it did result in an increase on all 3 when I went under 9% leading me to believe my CO balances were not being counted in installment utilization. There's no reason I would have gotten a bump on TU and EQ if they were.

That said, with the negative reason code 'amount past due' showing up on TU and EQ, there's solid reason to believe the CO balance in itself is factored into scoring in addition to the actual CO status of the account. It will be interesting to see if lowering the balance to $0 yields points. That would really confirm our hypothesis.
SoonerSoldier33
User avatar
Seasoned Rebel
  • Score data TU FICO 8: 641 EQ FICO 8: 616 EX FICO 8: 649
1
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

6 of 11
3 years ago
Wed Dec 22, 2021 4:42 pm
User avatar
Birdman
Primer AuthorCo-Founder
Birdman has been gardening for over 2 years.
Level30 Last INQWednesday, March 2, 2022 Gardening For2 years, 6 months, 14 days, 13 hours, and 35 minutes Next Level in15 days, 10 hours, and 25 minutes on October 2nd INQ 1yr onThursday, March 2, 2023 INQ 1yr reached1 year, 6 months, 14 days, 13 hours, and 35 minutes ago INQ 2yr onSaturday, March 2, 2024 INQ 2yr reached6 months, 14 days, 13 hours, and 35 minutes ago
SoonerSoldier33 wrote: ↑Wed Dec 22, 2021 4:23 pm I believe the small increase I saw when my previous installment loan went under 9% was minimized by my dirty scorecard, but it did result in an increase on all 3 when I went under 9% leading me to believe my CO balances were not being counted in installment utilization. There's no reason I would have gotten a bump on TU and EQ if they were. That said, with the negative reason code 'amount past due' showing up on TU and EQ, there's solid reason to believe the CO balance in itself is factored into scoring in addition to the actual CO status of the account. It will be interesting to see if lowering the balance to $0 yields points. That would really confirm our hypothesis.
Agreed and thank you for refreshing my memory. In my opinion, there already was solid evidence, due to the existence of the reason code itself (which is how I was aware of the scoring factor to begin with). But what you just produced confirms it in my mind, and also strongly indicates it does not contribute to installment utilization in my opinion. I’m convinced, but I hesitate to call it a fact without double confirmation. I have no doubt you will see an increase when it’s paid off, if it’s reporting monthly which it is correct? I look forward to seeing the increase! I’m so proud of how well you’ve done!
Birdman
User avatar
Primer Author
  • Score data EQ8-827; TU8-817; EX8-816
    EQ5-751; TI4- 800; EX2-814
1
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

7 of 11
3 years ago
Wed Dec 22, 2021 5:17 pm
User avatar
SoonerSoldier33
Seasoned RebelTeam Cash Back
Level9 Last INQMonday, November 27, 2023 Gardening For9 months, 20 days, 13 hours, and 35 minutes Next Level in10 days, 10 hours, and 25 minutes on September 27th INQ 1yr onWednesday, November 27, 2024 INQ 1yr in2 months, 10 days, 10 hours, and 25 minutes INQ 2yr onThursday, November 27, 2025 INQ 2yr in1 year, 2 months, 10 days, 10 hours, and 25 minutes Goal24 months Goal DateThursday, November 27, 2025 Goal In1 year, 2 months, 10 days, 10 hours, and 25 minutes
Birdman wrote: ↑Wed Dec 22, 2021 4:42 pm
SoonerSoldier33 wrote: ↑Wed Dec 22, 2021 4:23 pm I believe the small increase I saw when my previous installment loan went under 9% was minimized by my dirty scorecard, but it did result in an increase on all 3 when I went under 9% leading me to believe my CO balances were not being counted in installment utilization. There's no reason I would have gotten a bump on TU and EQ if they were. That said, with the negative reason code 'amount past due' showing up on TU and EQ, there's solid reason to believe the CO balance in itself is factored into scoring in addition to the actual CO status of the account. It will be interesting to see if lowering the balance to $0 yields points. That would really confirm our hypothesis.
Agreed and thank you for refreshing my memory. In my opinion, there already was solid evidence, due to the existence of the reason code itself (which is how I was aware of the scoring factor to begin with). But what you just produced confirms it in my mind, and also strongly indicates it does not contribute to installment utilization in my opinion. I’m convinced, but I hesitate to call it a fact without double confirmation. I have no doubt you will see an increase when it’s paid off, if it’s reporting monthly which it is correct? I look forward to seeing the increase! I’m so proud of how well you’ve done!
I agree about needing double confirmation. And, yes...my last installment CO is being reported monthly, so I really hope to see a score increase when the balance is reduced to $0. Then, it will just be the long wait for the CO status itself to age.
SoonerSoldier33
User avatar
Seasoned Rebel
  • Score data TU FICO 8: 641 EQ FICO 8: 616 EX FICO 8: 649
1
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

8 of 11
3 years ago
Wed Dec 22, 2021 6:36 pm
User avatar
LaHossBoss
Outlier
LaHossBoss has been gardening for over 2 years.
Level33 Last INQThursday, December 9, 2021 Gardening For2 years, 9 months, 7 days, 13 hours, and 35 minutes Next Level in22 days, 10 hours, and 25 minutes on October 9th INQ 1yr onFriday, December 9, 2022 INQ 1yr reached1 year, 9 months, 7 days, 13 hours, and 35 minutes ago INQ 2yr onSaturday, December 9, 2023 INQ 2yr reached9 months, 7 days, 13 hours, and 35 minutes ago
I actually have tons of personal experience with IL COs. For both myself and SO.

I have to say, in my experience, and I will have to dig up the evidence of it, that when SO went under 10% util on his only open and positively reporting IL, with several IL COs, that he gained no points for it. None. Same for me. I had the exact same experience when my only open and positive IL went under 10% util. I got nothing for it. All of these COs were absolutely being accounted for in scoring metrics. All the negative reason codes, for both of us, showed 0% paid on ILs. Maybe it is different for you somehow or maybe a different factor have you a score bump?
LaHossBoss
User avatar
Outlier
  • Score data EQ 8: 690 9: 655 5: 668 TU 8: 704 9: 658 4: 719 EX 8: 729 9: 642 2: 746
0
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

9 of 11
3 years ago
Wed Dec 22, 2021 11:35 pm
User avatar
Birdman
Primer AuthorCo-Founder
Birdman has been gardening for over 2 years.
Level30 Last INQWednesday, March 2, 2022 Gardening For2 years, 6 months, 14 days, 13 hours, and 35 minutes Next Level in15 days, 10 hours, and 25 minutes on October 2nd INQ 1yr onThursday, March 2, 2023 INQ 1yr reached1 year, 6 months, 14 days, 13 hours, and 35 minutes ago INQ 2yr onSaturday, March 2, 2024 INQ 2yr reached6 months, 14 days, 13 hours, and 35 minutes ago
Yes you do have a lot of experience with it and I seem to recall talking to you about that and that’s why I wasn’t expecting a bump, but he got one. And I think we ruled out if it was counting whether it would’ve crossed any obvious thresholds if I remember correctly. Unfortunately my memory hasn’t been great lately that was one of the reasons I had to take a break but doing A little bit better every day now. Got the right medication. So forgive me if my memory fails me and you have to remind me of something I should remember already. I remember having a hard time trying to remember when I was talking with @SoonerSoldier33 about this actually.
Birdman
User avatar
Primer Author
  • Score data EQ8-827; TU8-817; EX8-816
    EQ5-751; TI4- 800; EX2-814
0
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

10 of 11
3 years ago
Thu Dec 23, 2021 5:59 pm
User avatar
LaHossBoss
Outlier
LaHossBoss has been gardening for over 2 years.
Level33 Last INQThursday, December 9, 2021 Gardening For2 years, 9 months, 7 days, 13 hours, and 35 minutes Next Level in22 days, 10 hours, and 25 minutes on October 9th INQ 1yr onFriday, December 9, 2022 INQ 1yr reached1 year, 9 months, 7 days, 13 hours, and 35 minutes ago INQ 2yr onSaturday, December 9, 2023 INQ 2yr reached9 months, 7 days, 13 hours, and 35 minutes ago
Birdman wrote: ↑Wed Dec 22, 2021 11:35 pm Yes you do have a lot of experience with it and I seem to recall talking to you about that and that’s why I wasn’t expecting a bump, but he got one. And I think we ruled out if it was counting whether it would’ve crossed any obvious thresholds if I remember correctly. Unfortunately my memory hasn’t been great lately that was one of the reasons I had to take a break but doing A little bit better every day now. Got the right medication. So forgive me if my memory fails me and you have to remind me of something I should remember already. I remember having a hard time trying to remember when I was talking with @SoonerSoldier33 about this actually.
I am not coming down on anyone about this. I just happened to remember that we had both expected a score increase when our only open IL (Self) had reached 9%, but it did not gain us any points! The closed and CO'd ILs kept us down until they were gone. SO still has 1 unpaid IL (CO) and it has definitely impacted his score. Loosely believing the MyFico simulator, once that ages off he should be in the 800s. Even with the high util reporting now on 1 CC.
LaHossBoss
User avatar
Outlier
  • Score data EQ 8: 690 9: 655 5: 668 TU 8: 704 9: 658 4: 719 EX 8: 729 9: 642 2: 746
0
Top
Post

Re: Installment Loan COs, DPs, Scoring, and Discussion

11 of 11
3 years ago
Fri Dec 24, 2021 12:32 am
User avatar
Birdman
Primer AuthorCo-Founder
Birdman has been gardening for over 2 years.
Level30 Last INQWednesday, March 2, 2022 Gardening For2 years, 6 months, 14 days, 13 hours, and 35 minutes Next Level in15 days, 10 hours, and 25 minutes on October 2nd INQ 1yr onThursday, March 2, 2023 INQ 1yr reached1 year, 6 months, 14 days, 13 hours, and 35 minutes ago INQ 2yr onSaturday, March 2, 2024 INQ 2yr reached6 months, 14 days, 13 hours, and 35 minutes ago
Yes I remember we discussed it heavily when you were going through it and we were trying to figure it out and pin it down then.
No I didn’t mean you’re coming down on me, I’m just saying my memories not optimal right now.

And that’s why I always look for a double confirmation, there has to be a reason for the difference. I need to go refresh myself in the primer but I think that part was left where we weren’t positive. We will figure out a lot once we get the database up.
Birdman
User avatar
Primer Author
  • Score data EQ8-827; TU8-817; EX8-816
    EQ5-751; TI4- 800; EX2-814
1
Top
Sorting 

Return to “Credit Scoring Analysis”

Processing