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Paid off car loan, score dropped 80 points!

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Paid off car loan, score dropped 80 points!

I've been really focusing on paying everything down lately to get my utilization under 30% (it's at 38% right noow).  I recently paid the balance on my auto loan ($1900), paying it off about 6 months early, to free up the $300 to put towards revolving debt.  My score dropped 80 points!  From 679 to 592!  The comments on my auto loan are "closed" rather than paid in full, do you guys think this is why I had such a large drop?  The only changes to my report are decreased balances, so I'm not sure what else it could be!

Message 1 of 13
12 REPLIES 12
Valued Contributor

Re: Paid off car loan, score dropped 80 points!

Hi Angiel, welcome to the forums!

 

Was the auto your only installment loan?  If so, then paying it off and having it closed negatively affected your 'mix of credit', so you've been penalized.   You would regain those lost points by adding a new installment - though I wouldn't recommend obtaining a loan you don't need just for the sake of scoring.

 

However,  80 points seems like a lot for closed loan / credit mix penalty -- are the scores you are monitoring FICO scores?  Where are you getting them? 

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Starting FICO 8s | 09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
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Message 2 of 13
Frequent Contributor

Re: Paid off car loan, score dropped 80 points!

If that was your only installment loan, then that’s why your score dropped. FICO likes an open installment loan reporting less than 8.9% utilization.
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Message 3 of 13
New Member

Re: Paid off car loan, score dropped 80 points!

I have student loans as well that are installment loans.  The scores I checked were from credit karma, capital one, citi, american express, and discover.

Message 4 of 13
Super Contributor

Re: Paid off car loan, score dropped 80 points!

Where are you getting your scores from?

 

Was this your only open installment account?  No other loans, car leases, etc?

 

If it was your only open loan, can you tell us the original amount of the loan and the balance just before payoff?

 

If you can tell us all of these things, we can likely shed some light on the score drop.

 

PS.  I am also curious to hear what the interest rate was on the car loan and what the interest rate was on the credit cards that you are working to pay off.

Message 5 of 13
Super Contributor

Re: Paid off car loan, score dropped 80 points!

Looks like many of us asked some of the same questions at the same time.

 

Can you list for us all your loans, including the recently paid off auto loan?  Like this?

 

Loan 1.  Balance = _____   Orginal Amount = ____

Loan 2.  Balance = _____   Orginal Amount = ____

Loan 3.  Balance = _____   Orginal Amount = ____

etc.

 

For the auto loan, tell us the balance just before payoff.

 

As far as your scores from Karma, you should ignore those since they are based on the Vantage model and no lender or CC issuer uses those to make decisions.  Some of the other places you mentioned getting your scores from might also be giving you Vantage scores and those also should be ignored.

Message 6 of 13
Valued Contributor

Re: Paid off car loan, score dropped 80 points!


@Angiel42385 wrote:

I have student loans as well that are installment loans.  The scores I checked were from credit karma, capital one, citi, american express, and discover.


OK -- Credit Karma & Cap One scores are not FICO, so ignore those. 

 

American Express offers two scores - a Transunion Vantage score and an Experian FICO 8 score -- which one are you looking at?  

 

Discover:  if viewing from your account as a card holder, then that is a Transunion FICO 8 score.   If using Discover's free credit score site, then it is an Experian FICO 8 score.     

 

Citi offers Equifax Bankcard enhanced version of FICO 8 (which is different from FICO 8 Classic).

 

So.... considering only your FICO 8 scores, how much did your scores drop?  Was it still ~80 points? 

 

 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2019: EX 761 ✦ EQ 734 ✦ TU 757
Current FICO 9s | 11/2019: EX 768 ✦ EQ 775 ✦ TU 766
Highest FICO-8 Ever | 10/2018: 780 [on dirty report]

2019 Goal Score | 760s


My AAOA: 2.9 years not incl. AU / 3.0 years incl. AU
My AoOA: 6.9 years not incl. AU / 8.9 years incl. AU
Inquiries: EX 0/6 | 4/12 ✦ EQ 0/6 | 5/12 ✦ TU 0/6 | 1/12
Report Status: Clean

Tending my Garden til 6/2020


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 7 of 13
Super Contributor

Re: Paid off car loan, score dropped 80 points!

It sounds like the OP has open student loans, so the closure of this auto loan shouldn't have ruined their credit mix.

Message 8 of 13
New Member

Re: Paid off car loan, score dropped 80 points!

Yes - all of the scores from various places are within 4/5 points of each other.

 

The original balance was $15,000, I paid the remaining $1,900.

 

I have other installment loans:

Fed Loan: Orig. $32,220 Current : $47,714

Fed Loan 2:  20,500  26,094

Fed Loan 3: 20,500  25,519

Fed Loan 4: 20,500  22,608

Fed Loan 5: 20,500  21,714

Navient: 3,500  2,154

Navient: 3,000  1,721

Navient:  3,061  0

Message 9 of 13
Super Contributor

Re: Paid off car loan, score dropped 80 points!


@Angiel42385 wrote:

Yes - all of the scores from various places are within 4/5 points of each other.

 


Just be sure to ignore the non-FICO scores.  They seem to be within a few points of your FICO scores currently, which may cause you to [wrongly] believe that this will then always be the case... and if you saw a (say) 50 point drop to one of your non-FICO scores then it would mean your FICO scores would also drop around 50 points.  Be aware though that this is not true at all and no direct relationship/comparison can be formed between FICO scores and non-FICO scores.

Message 10 of 13
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