topic Re: Credit Karma says my score dropped for paying off a loan in Rebuilding Your Credit

Credit Karma says my score dropped for paying off a loan

Anonymous — Sat, 04 Apr 2015 11:54:58 GMT

According to CK, my TU score dropped 38 points and my EQ 27! The changes noted were car loan paid and closed (-$7,500), but it also says the loan was removed. I'm guessing the "removal" is what gave me the hit, even though the account still shows up on my CR as "paid - never late".

Going to have to wait and see what MyFico says about this change. If my score drops for paying off a loan, in full, with no lates, I think I'm going to give up on this credit repair game.

Re: Credit Karma says my score dropped for paying off a loan

Anonymous — Sat, 04 Apr 2015 12:36:39 GMT

@Anonymous wrote:
According to CK, my TU score dropped 38 points and my EQ 27! The changes noted were car loan paid and closed (-$7,500), but it also says the loan was removed. I'm guessing the "removal" is what gave me the hit, even though the account still shows up on my CR as "paid - never late".

Going to have to wait and see what MyFico says about this change. If my score drops for paying off a loan, in full, with no lates, I think I'm going to give up on this credit repair game.

If that was your only installment loan, then you might have lost the poitns because you don't have diversified credit any more.

Re: Credit Karma says my score dropped for paying off a loan

Shogun — Sat, 04 Apr 2015 15:06:17 GMT

It's because CK only scores "Open" accounts. They don't give you credit for closed accounts in good standing. FICO does.

Re: Credit Karma says my score dropped for paying off a loan

Anonymous — Sat, 04 Apr 2015 15:52:04 GMT

Your fico will take a hit but not as bad as CK . Probably lose 10-15 points . This is normal.

Re: Credit Karma says my score dropped for paying off a loan

ezdriver — Sat, 04 Apr 2015 15:59:01 GMT

Instead of focusing on credit scores, focus on the robustness of your credit profile. Also understand that scores are a "snap shot", a moment in time reflection of your overall credit profile in that instant ... and will be different shortly.

if you want useful feedback, tell us about your credit profile.

How many open/active tradelines?

Age of tradelines?

Mix of tradelines?

Any baddies?

Utilization level on revolving-credit tradeline?

The combination of these factors produce a score. You can't change a score without managing the driver components of the score.

Re: Credit Karma says my score dropped for paying off a loan

Anonymous — Sat, 04 Apr 2015 16:58:00 GMT

"It's because CK only scores "Open" accounts. They don't give you credit for closed accounts in good standing. FICO does."

Thanks for confirming. This was what I suspected, since CK said it was deleted yet still clearly shows on my CR.

Re: Credit Karma says my score dropped for paying off a loan

gdale6 — Sat, 04 Apr 2015 18:08:04 GMT

@Anonymous wrote:
According to CK, my TU score dropped 38 points and my EQ 27! The changes noted were car loan paid and closed (-$7,500), but it also says the loan was removed. I'm guessing the "removal" is what gave me the hit, even though the account still shows up on my CR as "paid - never late".

Going to have to wait and see what MyFico says about this change. If my score drops for paying off a loan, in full, with no lates, I think I'm going to give up on this credit repair game.

When your last installment loan closes it always results in a Fico score drop, so if its the only one you know why, the points can be recovered over time with good revolving credit habits.

As already said CK is the Vantage Score and it isnt used by many lenders at all.