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score went down

geminigirl71
New Visitor

score went down

I just bought a new car and paid off my old car loan.  Never had a late payment once, car is now paid in full and my score went down.  Anyone know why?

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slipper
Frequent Contributor

Re: score went down

Don't sweat the small stuff.  Small dips and bumps are temporary. Since you just took out a new loan, you are slightly less creditworthy. Meaning the bank may scrutinize a second car loan on top of the one you just created.

Thanks to myFICO

I went from bad to excellent credit
Almost non-existent SL to $180k+ total SL
Living with my parents to owning my own home
And I couldn’t have done it without YOU!

Revolving Portfolio: AmEx Pt NPSL, AmEx Au NPSL, Lowe's $50k, DCU Pt $35k,
HELOC $30k, CSP $24k, AmEx ED $20k, C1 QS $12k, Citi Sears $2k

What’s next? Another property, another sports car, and double my total SL!


Message 2 of 3
Revelate
Moderator Emeritus

Re: score went down


@geminigirl71 wrote:

I just bought a new car and paid off my old car loan.  Never had a late payment once, car is now paid in full and my score went down.  Anyone know why?


Installment loan utilization is apparently a thing under the FICO 8 model that virtually all FICO monitoring is based on, so is not having an installment loan at all apparently.

 

So in your case, you closed the prettier installment tradeline by paying it off, and opened up a brand spanking new one at maybe one payment into the 3 or 5 year term give or take.  As you pay it down your score will improve, may be an 80% line based on some very rough data, but in any case a drop in your scenario is expected.

 




        
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