Paid off car loan.. credit score drop??

Anonymous · ‎08-09-2019

Hi everyone,

I have Experian credit tracking and got a notification today that my credit score dropped 27 points from 758 to 729. Of course i was alarmed and immediately checked through all of my accounts to see if anything was late- I was not. But my auto loan that I recently paid off was changed to "paid off". I called experian and they were literally the definition of useless (reading the website alerts to me). I also obtained a hard copy of my report and went through it and cannot identify any new late payments.

Has anyone had any experience with this?

Anonymous · ‎08-09-2019

Do you have any other installment loans on your credit report?

Anonymous · ‎08-09-2019

Yes, I have one student loan

Anonymous · ‎08-09-2019

@Anonymous wrote:
Hi everyone,

I have Experian credit tracking and got a notification today that my credit score dropped 27 points from 758 to 729. Of course i was alarmed and immediately checked through all of my accounts to see if anything was late- I was not. But my auto loan that I recently paid off was changed to "paid off". I called experian and they were literally the definition of useless (reading the website alerts to me). I also obtained a hard copy of my report and went through it and cannot identify any new late payments.

Has anyone had any experience with this?

Is this the only loan you have? It could be because you lost the mix of different credit types.

Anonymous · ‎08-09-2019

Yes that is my only other installment loan debt (other than the newly paid off auto loan)

Anonymous · ‎08-09-2019

@Anonymous wrote:
Yes that is my only other installment loan debt (other than the newly paid off auto loan)

Do you have less than 6 accounts on credit report.

Anonymous · ‎08-09-2019

No, I have 11 open accounts revolving (1 installment)

Anonymous · ‎08-09-2019

Its not unusual to lose points after paying off an installment loan like a car loan. Since its your only installment loan you lost points for not having an optimized credit mix. The FICO scoring algorithm likes to see the presence of both revolving credit (credit cards) and installment loans, and your scores are usually highest when there's 8.9% or less remaining on a loan. Since you've paid it off the algorithm has lost one key factor in its ability to predict so it lowered your score.

If you search the Understanding FICO Scoring forum you will see this is a common complaint.

Anonymous · ‎08-09-2019

This makes sense.. thanks. Will this make a big impact on my ability to get new credit cards? For example I had just recieved a mailer for the Amex Gold card with a 50k bonus and was planning on applying for it..

Also are there any easy installment loans (low interest low debt amount) I can obtain to increase my score? Or should I just wait for it to go back up?

Anonymous · ‎08-09-2019

@Anonymous wrote:
This makes sense.. thanks. Will this make a big impact on my ability to get new credit cards? For example I had just recieved a mailer for the Amex Gold card with a 50k bonus and was planning on applying for it..

Also are there any easy installment loans (low interest low debt amount) I can obtain to increase my score? Or should I just wait for it to go back up?

Your scores are plenty good enough to obtain the Amex Gold.