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Did your credit drop or go up after paying car off

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Member

Did your credit drop or go up after paying car off

I just paid mine off 11 months early and it has not hit my file yet so I'm wanting to know experiences as I'm nervous that mine will drop drastically and I want to buy a house.
17 REPLIES 17
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Community Leader
Super Contributor

Re: Did your credit drop or go up after paying car off

If you don't have any other installment loans, it'll drop because you don't have an optimal credit mix.







Message 2 of 18
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Super Contributor

Re: Did your credit drop or go up after paying car off

Not knowing your profile, I'll take a guess between 15-30 points reduction if no other installment loan present.

ETA Report back if one of us guessed right.
Message 3 of 18
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Member

Re: Did your credit drop or go up after paying car off

My scores as of right now are 785, 787, and 779.
I've had my car for over 4 years and it was a 5 year term. I've had only ever had one credit card and that's about 6 or 7 years old. I've not had any missed payments and my DTI is very low if this helps at all
Message 4 of 18
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Super Contributor

Re: Did your credit drop or go up after paying car off

What was the utilization % of the car loan before payoff?
Message 5 of 18
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Community Leader
Super Contributor

Re: Did your credit drop or go up after paying car off

Well, you can offset the point loss by adding 2 more credit cards.







Message 6 of 18
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Super Contributor

Re: Did your credit drop or go up after paying car off

^ I agree. 3 credit cards and a installment loan nearly paid off with 8.9% utilization or less will give maximum FICO score.

However, OP wants to buy a house.
Message 7 of 18
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Member

Re: Did your credit drop or go up after paying car off

I'm sorry. I'm a little confused on what you mean by the utilation %.
I may look into the credit card suggestions if I choose to wait on my house as theres nothing in my area that I've really loved so far.

And I have a very good offer from a dealership on a new vehicle (I made a post about that already.
Message 8 of 18
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Super Contributor

Re: Did your credit drop or go up after paying car off

Balance / original loan amount = utilization %
Message 9 of 18
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Super Contributor

Re: Did your credit drop or go up after paying car off

It's recommended to have 3 credit cards to strengthen ones profile.

If you have a thin profile, changes in data can be magnified and your FICO scores will reflect it.

It's also recommended not to apply for credit 12 months leading up to a mortgage, depending ones profile.
Message 10 of 18
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