cancel
Showing results for 
Search instead for 
Did you mean: 

Auto loan paid off Fico score went down?

mbh4
New Visitor

Auto loan paid off Fico score went down?

Can someone help me to understand why would paying off an auto loan in full ahead of the scheduled end of the loan maturity might cause your Fico score to go down?

Message 1 of 4
3 REPLIES 3
thornback
Senior Contributor

Re: Auto loan paid off Fico score went down?

Was this your only active loan?

 

If so, FICO penalizes for having no active installment. 

 

If not, then paying off this loan may have increased your aggregate loan utilization (util of all active loans combined), which could decrease scores if a utilization threshold was crossed. 

 

Congrats on your payoff! Finances over FICO.

 

Welcome to the forums. 

Personal Aphorism:"Forget What You Feel, Remember What You Deserve"
Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 04/2022: EX 796 ✦ EQ 793 ✦ TU 790
Current FICO 9s | 04/2022: EX 790 ✦ EQ 788 ✦ TU 782
2022 Goal Score | 800s

My AAoA:
4.6 years not incl. AU / 4.9 years incl. AU
My AoOA: 9.2 years not incl. AU / 11.2 years incl. AU
Inquiries: EX 0/12 ✦ EQ 0/12 ✦ TU 0/12
Report Status: Clean
Garden Status:  


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 2 of 4
SouthJamaica
Mega Contributor

Re: Auto loan paid off Fico score went down?


@mbh4 wrote:

Can someone help me to understand why would paying off an auto loan in full ahead of the scheduled end of the loan maturity might cause your Fico score to go down?


It could be because you have no other open loans, so you are experiencing the 'no open loan' penalty.

 

Or, if you do have other loans, it could be because  paying off a mostly-paid-down loan  increased your aggregate installment utilization percentage.


Total revolving limits 699000 (597000 reporting) FICO 8: EQ 732 TU 721 EX 698

Message 3 of 4
disdreamin
Valued Contributor

Re: Auto loan paid off Fico score went down?

The irony is that even immediately opening a new auto loan won't restore those points unless you can also immediately pay it down to around 9% or so. It's odd, but I guess the good news is that DTI looks more attractive even if some of the FICO scores take a bit of a hit. I think I lost about 20 points or so on FICO 8's across the board when I paid off my auto loan off a couple years early.

Message 4 of 4
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.