Reason for Score drop?

[Etherial73]

I had two installment loans. One is an auto loan opened in August of last year. Current, never late. I opened a Self Lender loan in March of last year. Not needing the Self Lender loan due to the existing auto loan, I just paid the Self Lender loan in full and closed it. Always current, never late. I received score alerts today from MyFico and lost points due to the loan being paid off. It shows closed in good standing, never late.

I don't understand the score drop, as I still have an active installment loan in the auto loan. Also, I paid off all of the balances on my credit cards, only leaving $12 to report on one card to show <%8 untilization. Perfect payment history across the board on every account. My scores were climbing, now they're sliding down again. Literally nothing else in my profile has changed.

[FireMedic1]

Didnt say how much the score dropped.

[Etherial73]

Experian and TransUnion reporting a 7 point drop. No update yet on Equifax.

[Yeliaba1]

Sorry to hear that OP, but thank you for sharing.  I’m in the same situation as I get ready to apply for a mortgage.  I was almost convinced I would pay off my small balance and keep my auto loan.  I’ll wait until after closing and a few apps now.

[FireMedic1]

Many factors could have caused the drop. But 7 points isnt a cause for any alarms. Had an old account fall off. Not the oldest and lost 9 points. No big deal.

[Anonymous]

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@Etherial73 wrote:

I received score alerts today from MyFico and lost points due to the loan being paid off.

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The alert did not say that you lost points due to the loan being paid off.  Alerts don't tell you reasons for score changes.  They just tell you about a change to your credit report and they provide you with a score at that moment in time.  Any score change may or may not be related to the alert reason.  In this case, assuming the self lender loan was for a minimal amount (relative to your auto loan) there would essentially be no change at all in aggregate installment loan utilization here.  The only real change would be 1 less account with a balance, an event that wouldn't cause a score change or if anything would cause a gain of a couple of points.  Since you have your auto loan open still your credit mix is still satisfied.  Something else caused your score drop.