@Anonymous wrote:
Someone please explain how I can pay off an auto loan, zero late payments but my EQ drop 24 points. I'm don't get it!
Well, you can scroll through the list of topics in this "Understanding FICO scoring" and see a large number of other posters in the same situation. Every week, a few new people post exactly the same situation, exactly the same question. 20-30 point FICO drop every single time.
The reason is, FICO can score you only when you have an active open account. With an auto loan, you have been gradually paying that down over time, the utilization percentage has been dropping, the months of on time payments have been increasing, and your score has been benefiting to the tune of about 24 points as of last month.
When you rip that tradeline out of your scoring model, pay off or trade in your vehicle, FICO can no longer use it as part of the scoring, so the 24 points evaporates.
Suggestion to Moderators: This topic should really be a sticky at the top of the "Understanding FICO Scoring" forum. It's just too common not to take the time to point this out to all the new visitors.
