DId I make a HUGE mistake?

[EdwardMH]

I paid off my Car payment early this month in the hopes I can use the money to paydown the rest of my debt but my Experian credit score dropped 44 points because of it. from 709 to 665.

[Anonymous]

Making a payment earlier in the month shouldn't cause a huge dip. You didn't close the account and effect the age of your report. Are you sure there were no other changes to your report?

[EdwardMH]

I payed the Car Loan TOTALLY off.

[grillandwinemaster]

The absence of an installment loan caused your score to go down. However,  saving money ALWAYS trumps credit score. If your looking to apply for credit and need to maximize your score, search these threads for opening a small installment loan at a credit Union. If your not looking to apply for credit and don't need to maximize, don't worry about it. You can smile all the way to the bank because you're saving money! 

Great "credit future" to you!

[krielly]

IF the "rest of your debt" is revolving debt/credit cards, once you start paying down the debt and your utilization decreases, you could see a big increase in your scores. (Depending upon what your utilization is now, and what it will be reduced to)

K

[jim44]

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@grillandwinemaster wrote:

The absence of an installment loan caused your score to go down. However,  saving money ALWAYS trumps credit score. If your looking to apply for credit and need to maximize your score, search these threads for opening a small installment loan at a credit Union. If your not looking to apply for credit and don't need to maximize, don't worry about it. You can smile all the way to the bank because you're saving money! 

Great "credit future" to you!

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OP, I agree completely with grillandwinemaster.  Saving interest money always trumps credit score.  You should make sure just closing this installment loan has made your score drop that many points. In the end your score will bounce back and you'll have excellent payment history for future car loans if you need one. Well done! 

[EdwardMH]

I have  2 signature loans and 3 credit cards $35,000 at 65% utilization, My plan was to pay off the car and shove that extra $500 on the credit cards and loans to try to pay them all off by Dec. 2017 The cards should be paid off in 4-5 months.

[Appleman]

For others reading, pay down the revolving debt (credit cards first) as this will likely give you the best score. 

Was the car loan at a higher rate than the CC debt?

[StartingOver10]

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@Appleman wrote:

For others reading, pay down the revolving debt (credit cards first) as this will likely give you the best score. 

Was the car loan at a higher rate than the CC debt?

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^^^True, however, if you need that $500/month to pay down the revolving debt than what you did is fine. Don't worry about the short term drop in scores while you are paying off the cc's and other loans. Just don't apply for anything else until you get into a position to do so (better scores with lower cc utilization).

[Anonymous]

I had the same thing happen when I refinanced my car, the origional loan showed paid but the new loan was not yet reporting.  I agree with the other posters that you should make the best financial decision and not worry about the scores in the short term.  My opinion on paying off car loans is that last year or so is almost all principle (the interest is weighted towards the front of the loan) so there isnt much to be saved by paying them off early once you get to that point.  It is probably best to use the extra cash to pay off debt that is accruing interest first.  Having said that the best cars are the ones that are paid off.  I have enjoyed a couple of years of no payments on my BMW and it has been really nice.  Congrats.