topic Re: Load paid 5 months early. Score dropped 19 points. in Auto Loans

Loan paid 5 months early. Score dropped 19 points.

Anonymous — Fri, 06 Jun 2014 23:56:29 GMT

I recently decided to pay my loan off months before its mature date of 10/8/14. Loan started on 6/24/09 and I paid the final amount on 6/1/14. My scored just dropped from 681 to 662. You have no recent activity from a non-mortgage installment loan was the reason.

So happy my 09 370z is all mine. I plan on getting another car in a month or so. I was paying 8.19% through Nissan. I'm hoping to get that magical 3.9% or lower but dangit what a hit I took!

Anyone else have any similar experiences when paying off a loan early? Also fico tells me I might've moved up in a different credit user bracket thus the drop in points.

Re: Load paid 5 months early. Score dropped 19 points.

fezwhy — Fri, 06 Jun 2014 22:41:52 GMT

Is this your only installment loan or longest credit line? If so that could be the reason.

I have seen this happen when someone paid off their oldest credit account and it closed out.

However if you are getting another car loan then I wouldn't worry about it that much as you will get those points back.

Re: Load paid 5 months early. Score dropped 19 points.

Anonymous — Fri, 06 Jun 2014 23:52:58 GMT

Yes my car loan was my only installment loan and longest credit line. I have 2 credit cards going on 2 years old with a combined limit of $3000 using only ~$2000. A Diamonds Direct loan of $5000 opened on Dec. of 2013 with a balance of $3200 interest free until March 2015. No rent ot mortgage and income is ~$2200/mo. Im really hoping for a loan of $32000 for my dream car. A 2008 ISF.

Re: Load paid 5 months early. Score dropped 19 points.

StartingOver10 — Sat, 07 Jun 2014 01:11:48 GMT

@Anonymous wrote:
Yes my car loan was my only installment loan and longest credit line. I have 2 credit cards going on 2 years old with a combined limit of $3000 using only ~$2000. A Diamonds Direct loan of $5000 opened on Dec. of 2013 with a balance of $3200 interest free until March 2015. No rent ot mortgage and income is ~$2200/mo. Im really hoping for a loan of $32000 for my dream car. A 2008 ISF.

^^^ You will get those points back if you pay down your cc's - you have high utilization of 67% plus you have a new loan (or is it a cc??) of $3200 out of $5000 which is well over 50% of the credit line.

Pay your cc's down to less than 10% - pay off one entirely and the other less than 10% of the credit line. If the Diamonds Direct is a cc - then pay it down. If it is an installment loan what is the monthly payment when it kicks in? It could affect your car approval depending upon the payment.