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Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!

Diva365
Established Member

Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!

I'm in the process of buying a house and I need my scores to stay up. Wouldn't paying off a loan with no late history be a good thing? 

Message 1 of 15
14 REPLIES 14
RLDrax
Member

Re: Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!

I believe it has to do with your credit mix. Also the closing of an aged account. I could be wrong though. When I sold my house a similar thing happened to me when my mortgage account closed. 

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Message 2 of 15
FireMedic1
Super Contributor

Re: Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!

If that was your only installment loan. Then thats about how many pts are lost when its paid off. If you can get into NFCU or PENFED and grab a SSL and pay it down to 8% after the 1st statement. You'll get points back. No HP.






Homeowner since Sept 2020. My posts are JMHO. My siggy is not to brag. Just sharing my experiences after BK from learning here from rebuild to recovery from the @ 540's.
Message 3 of 15
SouthJamaica
Super Contributor

Re: Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!


@Diva365 wrote:

I'm in the process of buying a house and I need my scores to stay up. Wouldn't paying off a loan with no late history be a good thing? 


I would need to know what other intallment loans you have, if any, to be able to tell you why you experienced the score drop.

 

Most likely, it's got to do with a change in your installment loan utilization percentage, or with getting the 'no open loan' penalty.  In either case, you will probably find that your mortgage scores were not affected, or were much less affected, than your FICO 8's.


Total revolving limits 698000 (605000 reporting) FICO 8: EQ 721 TU 742 EX 715

Message 4 of 15
AzCreditGuy
Frequent Contributor

Re: Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!


@FireMedic1 wrote:

If that was your only installment loan. Then thats about how many pts are lost when its paid off. If you can get into NFCU or PENFED and grab a SSL and pay it down to 8% after the 1st statement. You'll get points back. No HP.


Doesnt this affect age? 

Message 5 of 15
FireMedic1
Super Contributor

Re: Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!


@AzCreditGuy wrote:

@FireMedic1 wrote:

If that was your only installment loan. Then thats about how many pts are lost when its paid off. If you can get into NFCU or PENFED and grab a SSL and pay it down to 8% after the 1st statement. You'll get points back. No HP.


Doesnt this affect age? 


Nope. Its still factured into # of accounts (open/closed) and AAoA's with FICO. With Vantage on CK it will affect it there.






Homeowner since Sept 2020. My posts are JMHO. My siggy is not to brag. Just sharing my experiences after BK from learning here from rebuild to recovery from the @ 540's.
Message 6 of 15
HeavenOhio
Community Leader
Senior Contributor

Re: Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!

@FireMedic1, VantageScore counts closed accounts in its age stats just like FICO. It's the fact that Credit Karma offers the average age of open accounts that misleads people.

 

@Diva365, which score decreased? As mentioned, the scores used for mortgages will be less affected by this closure.

Message 7 of 15
FireMedic1
Super Contributor

Re: Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!


@HeavenOhio wrote:

@FireMedic1, VantageScore counts closed accounts in its age stats just like FICO. It's the fact that Credit Karma offers the average age of open accounts that misleads people.

 

@Diva365, which score decreased? As mentioned, the scores used for mortgages will be less affected by this closure.


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Homeowner since Sept 2020. My posts are JMHO. My siggy is not to brag. Just sharing my experiences after BK from learning here from rebuild to recovery from the @ 540's.
Message 8 of 15
Diva365
Established Member

Re: Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!

Thanks for the advice. Pardon my ignorance but what is a SSL?

Message 9 of 15
Diva365
Established Member

Re: Why did my credit drop -21 after paying off my auto lease. Never missed a payment!!

Thanks for response. yesterday my TU dropped 21pts and today my Equifax dropped 40 UGGGGHHH. I've been working so hard for 3 years Smiley Sad
Message 10 of 15
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