So I paid off a car loan- never late. I got another loan but it has not hit the bureau yet. My score dropped 14 points! Can someone wine tell me why that would be?
12/22 : 
@Suzette2 wrote:So I paid off a car loan- never late. I got another loan but it has not hit the bureau yet. My score dropped 14 points! Can someone wine tell me why that would be?
If the auto loan you paid off is your only installment loan, you lost points because of "no installment loan". You'll get most of your points back when the new loan begins reporting.
You may have lost points even if this wasn't your only installment loan because your balance on installment loans compared to original loan amount is now a larger percentage.
A paid off installment loan stops factoring into your scoring matrix in all areas except age of account (can remain oldest account on record after paid).
@Suzette2 wrote:So I paid off a car loan- never late. I got another loan but it has not hit the bureau yet. My score dropped 14 points! Can someone wine tell me why that would be?
There are several possibilities.
1. If it was your only open loan reporting, and it was paid down to under 10%, you were getting points in your FICO 8's and 9's for low aggregate installment utilization percentage. You lost those points when you closed out the loan. Also you might have a penalty for no open loan.
2. If you had one or more other loans, the payoff might have raised your aggregate installment utilization percentage.
3. Sorry to say it, but your new loan might drop your scores even further, since it's a new account and when it reports it will be at 100% unpaid, instead of mostly paid down.
The good news is that it probably had less effect on your mortgage scores.
Quick question: will the new loan drop eventually raise with prompt payments? If so, how long does that take? I just got a AMEX Blue cash 3/22 and a Discovery It 3/22 - right before the car. Is 6 months (september) about the right time to start to see a rise again and then time to apply for another card?
Again, thanks....I have learned so much here!
Assuming on-time payments, scores will indeed rise with time. And 6 months is the right window to expect to see *some* increase.
But. as noted above, the percentage of the loan owing (as against the original amount) has a significant impact.
I feel your pain. Some months ago, when I paid off a loan (early), my scores dropped ~15 points. No cure but time and good behavior.
@Suzette2 wrote:Quick question: will the new loan drop eventually raise with prompt payments?
There are differences of opinion on this question among knowledgeable people in this forum. IMHO there are some slight increases along the way, but I don't know where along the way, or how slight. The only thing that is clear is that once your aggregate installment loan utilization gets down to below 10%, you will get a nice healthy boost from that, which you will then proceed to lose once it's down to zero. I.e. 1 to 9% is the sweet spot.
If so, how long does that take?
I just don't know.
I just got a AMEX Blue cash 3/22 and a Discovery It 3/22 - right before the car. Is 6 months (september) about the right time to start to see a rise again and then time to apply for another card?
There are way too many variables to answer that question. You'll just have to see.
Again, thanks....I have learned so much here!
Me too. Every day I learn something new.