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Paid/Closed Installment Loan Update - Score Drop

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Regular Contributor

Paid/Closed Installment Loan Update - Score Drop

I have had an auto loan for ~ 18mos.    I refinanced it about 6 weeks ago and that account reported.    So for ~ 3 weeks both installment loans were reporting.   Yesterday the first account was updated to paid/closed as exepcted but my scores dropped by 28 points on both TU and EX.

 

Wondering if this will recover shortly as there is that one installment loan that is needed to maximize scoring.

 

 

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Super Contributor

Re: Paid/Closed Installment Loan Update - Score Drop


@800goal800 wrote:

I have had an auto loan for ~ 18mos.    I refinanced it about 6 weeks ago and that account reported.    So for ~ 3 weeks both installment loans were reporting.   Yesterday the first account was updated to paid/closed as exepcted but my scores dropped by 28 points on both TU and EX.

 

Wondering if this will recover shortly as there is that one installment loan that is needed to maximize scoring.

 

 


Sorry, no.

 

You previously had one open installment loan which was mostly paid down, giving your FICO 8 a boost. And for a brief moment you had two open loans, with the old one dominating your aggregate installment utilization percentage.

 

Now you have one open installment loan which is not paid down at all, creating a drag on your FICO 8 score.

 

As you pay the loan you'll pick up a couple of FICO 8 points here and there. Once you get it down to 9% of the original loan, you'll get all of the points back which you haven't already gotten back by then.


Total revolving limits 719k (592500 reporting) FICO 8 scores: EQ 735 TU 782 EX 746
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Regular Contributor

Re: Paid/Closed Installment Loan Update - Score Drop

Hi.  My prior open installment loan was not close to being paid down when it was showing  open.  And the score drop occurred today when that loan was mark paid.

 

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