Score drop by 40 points

[Csistru1]

Good afternoon community, my credit has greatly improved since joining 2 years ago from low 600 to now 720. Today I updated my report and my Experian score dropped by 44 points sending my score to 680 range. Only recent thing I e done was pay off a installment loan, I refinanced my truck for a lower rate and opened 3 new cards after gardening for 6 months.

Any advice will be helpful, thanks in advance

[GZG]

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@Csistru1 wrote:

 Only recent thing I e done was pay off a installment loan, I refinanced my truck for a lower rate

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has the new loan reported yet?

There's a penalty for not having an open loan and you lose the bonus for not having a loan at low balance

and you opened three cards, all of which will lower your score when they report assuming you have no baddies

and added 3? inquires 

[Csistru1]

The new loan has reported, on my fico my score is 688 and on Experian website it's at 726. 
I have 6 inquiries which all have been reported to experian already with no drop on my credit score on their site.

my fico has not given a reason for drop on their site as of yet.

[CreditCuriosity]

That will certainly do it depending on profile.. I have a very thick credit profile and about 6 months ago was sitting in 840's across all 3 CRA's FICO 8 scores.  Bought a house, sold a car(50% paid off), got a new car and opened up 5 CC's for bonuses as had to spend money on new house as well.. Went from 840's to 770's-790's.  I am starting to get above 800 again.  Reasons?  HP's point hits, new accounts, new installment loans.  So on one report dropped near 70-80 points, but it is recovering and within year will be around 820-840 i suspect.  Installment loans show at 100% or did and then the other stuff mentioned above.  I was actually surprised I took as big as hit as I did, but still solid scores and it will come back.   This is sitting at 1% CC utilization the combination mainly of new installment loans was the biggest pain and paying off the old installment loan that was decently paid down was the other big pain with mild point losses due to HP's and new CC accounts

[SouthJamaica]

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@Csistru1 wrote:

Good afternoon community, my credit has greatly improved since joining 2 years ago from low 600 to now 720. Today I updated my report and my Experian score dropped by 44 points sending my score to 680 range. Only recent thing I e done was pay off a installment loan, I refinanced my truck for a lower rate and opened 3 new cards after gardening for 6 months.

Any advice will be helpful, thanks in advance

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Most likely you've been hit with a penalty for high installment loan utilization. E.g., if your old loan was down to a balance of 9% or less of the original amount, you were in the sweet spot for installment utilization. But then along comes your new loan, which is reporting at 90-something percent of the loan amount, so you get hit for having high utilization.

One thing in which you can take comfort: while this penalty can be devastating to one's FICO 8's and 9's, it has little or no effect on the mortgage scores for some reason.

I must say that 44 points is on the high side, but it's not uncommon for this to cost around 32 points in the FICO 8's.

[mfinsmi1]

@Csistru1 when you pay off a loan it can drop your score, when you add a new loan or credit account, all these things can drop your score. The good news is that this is just TEMPOARY and your scores will bounce back in a couple of months 

[SouthJamaica]

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@mfinsmi1 wrote:

@Csistru1 when you pay off a loan it can drop your score, when you add a new loan or credit account, all these things can drop your score. The good news is that this is just TEMPOARY and your scores will bounce back in a couple of months 

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The evidence is to the contrary.  The full recovery of those points will probably not occur until the new loan is paid down to below 10% of the loan amount.  There might be a few points picked up here and there as the loan gets paid down, but not many.