Made last car payment. Score dropped 20 points

[Anonymous]

This is insane to me. I know it will recover, but really!?!?

[Anonymous]

Was this your only open installment loan and did it report closed now?

If so, that sort of score drop is 100% expected.  The FICO algorithm needs to see an open installment loan to know that you're currently able to make on-time payments from month to month.  Once you have no open loans, you have no means of showing the ability to make monthy on-time payments and thus incur the resulting score ding.

There's a work-around for this, though, if you'd like to get those points back.  If you search for the share secure loan technique, you'll find just about everything you'd ever want to know about it.

[RonM21]

OP this is unfortunately the way the scoring works, as BBS noted above, which it sounds like you already knew.  It does sting as you would think by paying off a debt that you would not get dinged for that, and maybe even rewarded.  But as mentioned, the scoring is more based off of how you are managing current open accounts.  It is till an accomplishment that you handled your financial obligations though, and certainly does not take away from that!!

[Anonymous]

I sort of look at it as a glass half full glass half empty argument.  While some may say that they're being dinged for closing their only open installment loan, someone else can equally argue that this isn't the case and that a person with an open installment loan is simply receiving a scoring bonus for showing the ability to properly manage an [open] installment account.