Three score drops due to auto-refinance....ugh

[Greenivy]

So I completed an auto-refinance a few weeks ago.  I knew I would be dinged a few points for the inquiry...I think it was 2 points. Then I had an eight point drop once the new loan was added to my profile....mind you, the old one hadn't fallen off yet so it looked like my auto loans were now double the amount.  And today, I get dinged another 8 points due to the original auto loan falling off.  In my opinion it should've been a wash as far as the accounts since one simply replaced the other (for the same amount)....... So all in all 18 points.   Next time I will be better prepared for this.

[maxchurn]

It'll bounce back shortly, if the refinance renewed your AAoA that could also be why your score dropped.

[Greenivy]

The original loan was only a year old.....so didn't think it would impact AAoA by that much.....guess I was wrong.

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@maxchurn wrote:

It'll bounce back shortly, if the refinance renewed your AAoA that could also be why your score dropped.

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[DSTforlife]

your installment loan LTV went back up once your previous auto loan closed....it may now be at 100% depending on how the new loan was reported.  this causes point loss also.

[Greenivy]

But how?  It was lit

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@DSTforlife wrote:

your installment loan LTV went back up once your previous auto loan closed....it may now be at 100% depending on how the new loan was reported.  this causes point loss also.

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erally for the same exact amount.  The only change was literally the company that handles it.  Its not like I went and got a new car where it was an increased amount over my current loan.

[greg_the_egg]

The new loan is near 100% remaining balance, whereas the original loan may have been paid down to a remaining balance of between 75% - 85%, depending on the APR, and payments made to date. Some score models take this into account. Understand that your new loan's total loan amount is only as high as the most recent remaining balance of the first loan. 

[Greenivy]

I had only paid off maybe 5% of the original loan balance due to a high APR, so for me that shouldn't account for that much of a drop.

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@greg_the_egg wrote:

The new loan is near 100% remaining balance, whereas the original loan may have been paid down to a remaining balance of between 75% - 85%, depending on the APR, and payments made to date. Some score models take this into account. Understand that your new loan's total loan amount is only as high as the most recent remaining balance of the first loan. 

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