@Anonymous wrote:I refi-ed my car loan with Penfed (1.99) and paid off Chase. Paid loan hit EX today dropping my score by 14 points. Anyone know how long it takes to recover? The Penfed loan showed up right away. So for about a month I had 2 car loans showing...
Your installment loan factor will recover as your new loan gets paid down. Won't happen quickly unless you pay down the new loan quickly.
You'll have to look elsewhere to pick up points.
My scores aren't bad. I was creeping toward mid 700's across the board. After many inquiries and new accounts I was just really seeing some nice recovery. Now EX 739, after car pay off. TU 760 and EQ 741 but the car payoff hasn't shown up yet...
The trade off is worth it... lower car payments. But lower scores for the next few months. I swear credit is one step forward and two steps back
@Anonymous wrote:My scores aren't bad. I was creeping toward mid 700's across the board. After many inquiries and new accounts I was just really seeing some nice recovery. Now EX 739, after car pay off. TU 760 and EQ 741 but the car payoff hasn't shown up yet...
The trade off is worth it... lower car payments. But lower scores for the next few months. I swear credit is one step forward and two steps back
Or you can look at it the other way... one step back and two steps forward 
That's honestly not a bad point drop that you got. Most people report 20-25 points when they close out their installment loan. The rest of your credit profile, just aging and on time payments with keeping utilization low is going to grow your score more than those 14 points in say 6-8 months even with that refinanced loan at or near 100% balance still. It will likely take a few years (depending on the term of your refi) before you recoop the 14 points you lost based on the installment loan itself... but what I'm saying is you'll recoop those points via other means long before that, so I wouldn't sweat it.
@Anonymous wrote:
@Anonymous wrote:My scores aren't bad. I was creeping toward mid 700's across the board. After many inquiries and new accounts I was just really seeing some nice recovery. Now EX 739, after car pay off. TU 760 and EQ 741 but the car payoff hasn't shown up yet...
The trade off is worth it... lower car payments. But lower scores for the next few months. I swear credit is one step forward and two steps back
Or you can look at it the other way... one step back and two steps forward
That's honestly not a bad point drop that you got. Most people report 20-25 points when they close out their installment loan. The rest of your credit profile, just aging and on time payments with keeping utilization low is going to grow your score more than those 14 points in say 6-8 months even with that refinanced loan at or near 100% balance still. It will likely take a few years (depending on the term of your refi) before you recoop the 14 points you lost based on the installment loan itself... but what I'm saying is you'll recoop those points via other means long before that, so I wouldn't sweat it.
Agreed, good advice.
Not too bad on the score drop. I've learned patience is key when building credit. Sometimes you have to make decisions that will help you more than your credit at first. But you should be okay in the long run!
