FICO Dropped 30 Points After Paying Off Auto Loan

[DoctorLoomis]

I know why it happens but still irritates me to no end. All FICOs were 820 +. Transunion will probably drop tomorrow as the paid loan will update there. Ridiculous.

[Anonymous]

@DoctorLoomis Totally share your feelings. Lost 22 points on the installment loan payoff (vehicle). At that point there were no open installment loans on my credit files. As we know this sure affects our scores

[Duke_Nukem]

Agree, it is a silly scoring punishment (but is probably more of an "award" in scoring purposes).  I've been holding out paying off our last auto loan (with a $15 balance for a while now) to keep from getting hit with that scoring drop.  This month is the payoff month, so next month will be the big drop for us.

[Mr_Mojo_Risin]

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@DoctorLoomis wrote:

I know why it happens but still irritates me to no end. All FICOs were 820 +. Transunion will probably drop tomorrow as the paid loan will update there. Ridiculous.

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Yep, totally agree with you, I think it's pretty silly how this is treated.

[disdreamin]

I feel your pain, I lost between 22 and 25 points for my last installment loan reporting as closed. I'll be curious if I recover any of that once my new auto loan reports.

[DarkKnight_Credit]

I'm about 26% away from paying off my auto loan. I really hope that my current score doesn't drop after it's paid off. I will be paying it off in a couple of months after I get my new car.

Edit: I am expecting my score to drop after another new loan is reported. But I wouldn't feel too bad, because I'm sure you'll get the points back at some point.

[FireMedic1]

With your scores after the loan. Many would die to have those. They're just as good as all 800's. Agree it doesnt make sense one bit.

[SouthJamaica]

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@DoctorLoomis wrote:

I know why it happens but still irritates me to no end. All FICOs were 820 +. Transunion will probably drop tomorrow as the paid loan will update there. Ridiculous.

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Agreed. It's ridiculous.

[SouthJamaica]

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@disdreamin wrote:

I feel your pain, I lost between 22 and 25 points for my last installment loan reporting as closed. I'll be curious if I recover any of that once my new auto loan reports.

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You will not recover any of that. In fact you will no doubt lose more points.

Only when that new loan gets into the mostly-paid-off status, defined as below 10%, will you get your points back.

I'm assuming that that was your only outstanding loan. If there are others then the math changes.

[disdreamin]

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@SouthJamaica wrote:

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@disdreamin wrote:

I feel your pain, I lost between 22 and 25 points for my last installment loan reporting as closed. I'll be curious if I recover any of that once my new auto loan reports.

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You will not recover any of that. In fact you will no doubt lose more points.

Only when that new loan gets into the mostly-paid-off status, defined as below 10%, will you get your points back.

I'm assuming that that was your only outstanding loan. If there are others then the math changes.

Interesting. I thought credit mix was a factor and currently I have no active installment loan. I'll keep an eye on it, but since I don't plan to apply for anything I'm not concerned.

Edited to add: funny enough, got the alert for the new loan just now and -11 points, I'm currently sitting at 809. Apparently it's bad to have no installment loan and it's bad to have a new one lol. It'll be PIF next summer and then we can start the whole "lets take away points" again, so that'll be fun.