@PufferKing wrote:Filed bankruptcy alittle more then 3 years ago and have rebuilding my credit since. Last month my Equifax score from myFICO was at 680.
I had a secured loan from Navy fed for $4000 and paid $226.00 a month that was paid off on 8/21 then come September my credit score dropped -21 points WTH(the reason was one of your accounts has decreased by $226.00)The loan was paid on time every month never late and was at the end of it term.
I have credit cards that are paid on Time or I completely pay off every month and have low balances on them.
my FICO says my credit utilization is at 9%why did it drop -21 points because I finished paying off my loan.
Anyone know why this happened seems like something is wrong.
because both having an open loan and having a loan nearly paid off provide credit score bonuses
when you don't have an open loan and that open loan isn't paid off over 92%, you lose 20-35 points
the whole goal of navy fed secured loans is to pay them down over 92% as soon as you get them and let them sit nearly paid off for the entire 5 year term (because navy fed pushes back the due date to the near end of the term) so you get the credit score benefit of that loan for the entire term
0/6, 2/12, 7/24
It is the penalty for being a bad debt slave, you can't just stop owing a bank money!🤪
@FicoMike0 wrote:The trick part is to use a lender who won't decrease the term of the loan when you prepay. Most will. You want to end up not oweing payments for several years, zero due every month, the loan reporting paid current, 9% balance, for all those years. The only ones I know of who do this are navy and penfed.
One Main Financial personal loans work that way too, just the interest accrued on the small remaining balance would be double or more the ones from NFCU or Penfed.