topic Re: Loan paid off - score drop? in General Credit Topics

Loan paid off - score drop?

Anonymous — Wed, 10 Jun 2015 04:24:31 GMT

While I am trying to build up my scores my auto loan just got paid off last month.

It now is showing paid/closed and my scores dropped, mostly with TU 26 points on my fico score.

I have a CU personal loan, and 2 other loans I took out when I ran into some major home and car issues.

My CU may have added to my current loan, but I thought it was too recent to try, so the other 2 are local high interest loan companies.

Total in loans about 4800.00.

I also have a 30y mortgage account that is 11 years old.

I have 1 paid collection on my reports, medical for 85.00. All other baddies taken care of.

In the past month I got my first CC in over 15 years, Barclay rewards MC 1000.00 , and an Overstock store card for 2000.00

Inquiries right now- TU=1 EX=0 EQ=3

Would it be better for me to now apply for another CC and then work those, or just wait it out with what I have?

Current scores:

EX 689 (fico)
TU 716 (FACO) 656 (FICO)
EQ 669 (fico)

Just wondering if another card would offset that auto loan payoff.

Thanks.

Re: Loan paid off - score drop?

takeshi74 — Wed, 10 Jun 2015 12:20:41 GMT

@Anonymous wrote:
Loan paid off - score drop?

That's typical and expected. Your score was benefitting from having the open installment. Since it's closed you're no longer getting at least some of that benefit.

@Anonymous wrote:
Just wondering if another card would offset that auto loan payoff.

It's difficult to say. It's not just a matter of the card itself but your existing credit and how the new card would factor in. We have no idea what limit you'd be approved for and no idea of your current revolving utilization so we can't really make an educated guess there. You'd take hits to your AAoA and from the HP. If you just got your first card in over 15 years last month and your cards have 1K and 2K limits then I wouldn't expect a new card to gain you 26 points but that's just a guess without much info to work with.

If you're worried about your score then work on getting the derog removed. It's a more significant factor and will have a bigger impact. If you have not already then hit the Rebuilding subforum and carefully research before taking action.

Re: Loan paid off - score drop?

Anonymous — Wed, 10 Jun 2015 15:16:19 GMT

What I should have mentioned is that in a few months I want to get another car loan,

So I was looking to get the best scores I could by then.

The derog I have from that medical bill is only on EX right now, it should never have been there (paid before collections, but OC failed to ;post the payment) but I have not been able to get it removed yet.

I have had three auto loans from my CU in the past 10 years, never late, paid in full. Two of those cars I gave to my chldren, but now the one I have is too much on gas (15-18 MPG ) and want a smaller more gas efficient car.

The lowest file age I have is with EQ, they are about 12 years, the longest is EX they have 27 years.

My AAoA is about 5 years overall even with the 2 new cards.

So I am on the fence, even with my good credit with my CU I seem to pay higher interest rates then others as I seem to apply when just under their better rate scores.

I guess there is no magic way to better scores in the next few months..