4
My credit score dropped 60 points after I paid off my car loan last month
I finally paid off my 2018 Honda Civic loan three weeks ago, thought I was doing something great. Then I checked Credit Karma last Tuesday and saw my score went from 742 down to 682. My oldest account was that car loan at 6 years, so closing it shortened my credit history length by a lot. The mix of accounts changed too, now I only have credit cards and no installment loans. Did anyone else get hit hard by paying off a loan? How long did it take your score to bounce back?
3 comments
Log in to join the discussion
Log In3 Comments
elizabethmason1mo ago
Jenny hit on something real with the secured card idea. Opening a new credit line can help rebuild that mix of accounts and add some fresh history to offset the closed loan. It's a solid move that smoothed things out for her in a few months, so worth trying if you're not in a hurry to apply for anything big.
6
mark_carr71mo ago
Wait till you find out that paying off your mortgage early can give you an even bigger surprise. Sounds like you got punished for being responsible, which is basically how credit scores work. I think the whole system is designed to keep you in debt forever, like a loyalty program for people who owe money. But yeah, that secured card trick is probably your best bet, even if it feels stupid to open new debt after you just got rid of old debt. Just give it a few months and your score will come back, assuming the credit gods are in a good mood.
4