Unpopular opinion: I was happy to see a 40 point drop on my report.

It was from paying off my car loan in Seattle, which closed the account. Now I know my score will bounce back in a few months, but has anyone else felt weirdly relieved finishing a big debt even with the temporary hit?

2 comments

2 Comments

david_craig9d ago

Wait, your score dropped FORTY points just from paying off a car? That seems crazy to me. My score only moved like five points when I paid off my student loan. What kind of scoring model are they even using that punishes you for being responsible? Does it matter which bank you had the loan with?

jana_price9d ago

The scoring models really hate when you close your only installment loan. In my case, my car loan was my oldest account by a decade. When I paid it off, my "credit mix" went from good to just credit cards, and the average age of my accounts took a huge hit. It didn't matter which bank it was with, the system just saw a long history suddenly gone. It's less about punishing responsibility and more about the algorithm losing a key data point it liked. It usually bounces back in a few months, but that first drop is a real shock.