Credit score drop - pack of installment payments

[lindyanne]

So I just got the alert on my cc for my new FICO score and it has dropped around 40 points since they last reported. The main factor was ‘lack of recent non-mortgage installment payments’.

DH has a company car. We payed off my car last summer and our house in January. We have ‘cc debt’ depending on when they report it but if it’s been a month where we have been spending an obscene amount (normal lately with some house renovations lately) I have been paying mid-month to keep the utilization from being too high.

I don’t know that my/our credit score matters that much. We aren’t ever planning to move and are planning to pay for our cars in cash/trade going forward but should I take out a loan just to have this recent ‘history’?

[statgirl]

I would not. We went to buy a house a few years ago and our credit union did not pre-approve us for a mortgage because my husband had no credit score (we had paid off our mortgage with that credit union a few years prior). We tried a different credit union and they had no issue approving us even with his lack of a score (because he did have some credit history) and we got a great rate.

Unless your score was sub-prime to begin with, you will probably be fine.

[ellipses84]

I’ve had the same debate and it’s so annoying. I think the credit system needs an overhaul to fix issues like this.

We used to own a house but don’t at the moment. We do plan to buy a house again eventually so it’s probably more critical for us. We’ll probably pay mostly cash for our next vehicle, but finance a small, long term, low interest payment in both our names. For you I wouldn’t worry about it. I’m sure it won’t drop that much and you have enough history and savings/ retirement money that getting a big loan in the future won’t be an issue based on the credit score.

[ellipses84]

Also, we have a lot of credit monitoring on various accounts and the scores fluctuate a lot depending on the method they used. When we actually had to have a credit report pulled for something official, the score they saw was a decent amount higher than any of our accounts were showing.

[ssmjlm]

I think the online free credit scores are way off. We just bought a truck for DH and my score was a lot higher than whatever CapOne gives me for free and DH's was lower. But we still got great financing.

ETA: We haven't had a car payment since early 2016, so that obviously did not affect our ability to get a car loan and get a good rate.

[Susie]

Jun 8, 2022 22:13:17 GMT -5 lindyanne said:

should I take out a loan just to have this recent ‘history’?

I would take out a loan at 0% for this purpose, but I wouldn't pay interest just to have a loan.  If you have the option for 0% financing on your next car, or 0% financing for a year on a home improvement, then sure.  Good for the credit score, good for financial flexibility, and the price is right.  Then maybe finance instead of paying cash.  We've done it with cars, and I'm doing this year with replacement windows for our whole house.  But otherwise, no, I wouldn't.

[zaneyzoo]

Jun 8, 2022 23:28:50 GMT -5 ellipses84 said:

I’ve had the same debate and it’s so annoying. I think the credit system needs an overhaul to fix issues like this.

We used to own a house but don’t at the moment. We do plan to buy a house again eventually so it’s probably more critical for us. We’ll probably pay mostly cash for our next vehicle, but finance a small, long term, low interest payment in both our names. For you I wouldn’t worry about it. I’m sure it won’t drop that much and you have enough history and savings/ retirement money that getting a big loan in the future won’t be an issue based on the credit score.

I 100% agree.  I work in insurance and industry has shifted towards credit based insurance scores, so people who don't have much credit typically get penalized  on premiums because of the "score".  It's an arbitrary bullshit number that justifies premiums.  I hate it and think it's a crock.  The credit system itself is broken.

[ellipses84]

[/quote]I 100% agree.  I work in insurance and industry has shifted towards credit based insurance scores, so people who don't have much credit typically get penalized  on premiums because of the "score".  It's an arbitrary bullshit number that justifies premiums.  I hate it and think it's a crock.  The credit system itself is broken.[/quote]

Totally! DH’s credit score significantly dropped after he paid off his last student loan.

[quesyrah]

Jun 9, 2022 7:35:29 GMT -5 ssmjlm said:

I think the online free credit scores are way off. We just bought a truck for DH and my score was a lot higher than whatever CapOne gives me for free and DH's was lower. But we still got great financing.

ETA: We haven't had a car payment since early 2016, so that obviously did not affect our ability to get a car loan and get a good rate.

The score capital one shows me is always a good 20-30 points higher than what Experian shows me. It’s so odd.