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Credit Score Drop
Posted on 4/18/17 at 7:16 pm
Posted on 4/18/17 at 7:16 pm
Why does your credit score drop when you pay off a loan? I get that its decreasing your total credit limit, but isn't the point of a credit score to show how likely creditors are to get their money back from you? By paying off a vehicle, I feel like that says you're pretty credit-worthy...but my 20 point drop says otherwise... I'm just feeling discouraged since I've been working really hard to increase my score...
7
Posted on 4/18/17 at 7:26 pm to iLikeMike
Don't stress too much about it. In the long run you'll be fine.
Also make sure your credit report is accurate, just to make sure.
Also make sure your credit report is accurate, just to make sure.
Posted on 4/18/17 at 7:26 pm to iLikeMike
Your average credit history age dropped
Posted on 4/18/17 at 7:28 pm to HeadyMurphey
Didn't think about that. Makes sense...
Posted on 4/18/17 at 8:38 pm to iLikeMike
FICO scores are paid for by big banks , if you do not play kissy face with them (i.e. Pay a ton of interest ) your score will drop
#ShockedFace
It what it is I guess . I did a credit score review through TransUnion. The biggest factor weighing down my score? I own my home and do not have a home mortgage .
Great, because I saved and invested wisely, I'm screwed
#ShockedFace
It what it is I guess . I did a credit score review through TransUnion. The biggest factor weighing down my score? I own my home and do not have a home mortgage .
Great, because I saved and invested wisely, I'm screwed
Posted on 4/18/17 at 8:44 pm to crazycubes
quote:
The biggest factor weighing down my score? I own my home and do not have a home mortgage .
Great, because I saved and invested wisely, I'm screwed
That's because the point of a credit score is to show how responsible you are with *borrowed* money. Not money in general.
If you haven't borrowed much within the past seven years, you don't have a track record.
Posted on 4/18/17 at 8:53 pm to foshizzle
True, and my kissy face bank FICO score is not bad, but I want to make it better and have no way to do so (at least not to my knowledge )
Posted on 4/18/17 at 9:04 pm to crazycubes
quote:
I want to make it better and have no way to do so (at least not to my knowledge )
Sure you do! Borrow money and then show how dependable you are at repaying it.
If you don't want to borrow money, then don't worry about your credit score because it isn't important unless you do want to borrow money.
Posted on 4/18/17 at 9:24 pm to foshizzle
quote:
Sure you do! Borrow money and then show how dependable you are at repaying i
I need to find a bank that is offering 0.0% interest
Posted on 4/18/17 at 9:52 pm to iLikeMike
quote:
I'm just feeling discouraged since I've been working really hard to increase my score...
You should feel the exact opposite. You just paid off a debt.
Pay enough of these off, save enough cash and perhaps you won't have to borrow again.
Posted on 4/18/17 at 11:35 pm to crazycubes
I have wondered about that also. My home has been paid off for 5 years and they dimg me on my FICO.
And just for my informarion, what is considered a good FICO score?
And just for my informarion, what is considered a good FICO score?
This post was edited on 4/18/17 at 11:38 pm
Posted on 4/18/17 at 11:52 pm to GenghisKhan
720 or above imo
Posted on 4/19/17 at 12:27 am to crazycubes
This is simply not true.
"Paying interest" does not affect the credit score in the least bit. The reported statement balance does and that is what gets reported on month to month basis, thus impacting your revolving debt utilization. It's what is reported on billing statement, not the balance after due date of payment.
Higher interest rate car loans do not earn you better credit rating than 0.9% financing.
"Paying interest" does not affect the credit score in the least bit. The reported statement balance does and that is what gets reported on month to month basis, thus impacting your revolving debt utilization. It's what is reported on billing statement, not the balance after due date of payment.
Higher interest rate car loans do not earn you better credit rating than 0.9% financing.
This post was edited on 4/19/17 at 4:41 am
Posted on 4/19/17 at 2:24 am to iLikeMike
quote:
I get that its decreasing your total credit limit,
wat.
Posted on 4/19/17 at 7:28 am to iLikeMike
Spinoff question, why does my credit score go up or down depending on when I pay off my credit card? I always pay it off completely, but sometimes I forget til I get the notice that the bill is due soon. And when I pay it off last minute, my credit score drops like 30 points
Posted on 4/19/17 at 8:18 am to Upperdecker
quote:
Spinoff question, why does my credit score go up or down depending on when I pay off my credit card? I always pay it off completely, but sometimes I forget til I get the notice that the bill is due soon. And when I pay it off last minute, my credit score drops like 30 points
reported utilization
Posted on 4/19/17 at 8:23 am to 13SaintTiger
Exactly that.
The report pulls on a certain day of the month. If you aren't shopping for a loan i would wait until the last day to pay (maximize your 0.0% loan term). When it comes time to shop for a loan pay it 3 or 4 days before the reporting date.
The report pulls on a certain day of the month. If you aren't shopping for a loan i would wait until the last day to pay (maximize your 0.0% loan term). When it comes time to shop for a loan pay it 3 or 4 days before the reporting date.
Posted on 4/19/17 at 8:46 am to Upperdecker
quote:
Spinoff question, why does my credit score go up or down depending on when I pay off my credit card? I always pay it off completely, but sometimes I forget til I get the notice that the bill is due soon. And when I pay it off last minute, my credit score drops like 30 points
Statement date vs due date.
Posted on 4/19/17 at 8:58 am to HeadyMurphey
quote:
Your average credit history age dropped
Are you sure? If it was an auto loan, it was probably newer than his mortgage and credick cards, so taking it out would make his average account older.
Posted on 4/19/17 at 9:00 am to Will Cover
quote:
Pay enough of these off, save enough cash and perhaps you won't have to borrow again.
But doesn't the FICO score affect rates other than interest (like some types of insurance)? Heard that somewhere but not 100% sure.
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