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My bank told me my credit score dropped 40 points because I paid off a car loan early
I closed out a $12k auto loan last year thinking it looked good on my report, but the loan officer explained how paid-off installment loans age off faster than revolving credit, and now I'm stuck rebuilding with two credit cards, has anyone else been hit by this same surprise?
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nora_park7217d ago
Honestly used to think paying off loans early was always the smart move lol. This definitely changed my mind after seeing how the credit system actually works.
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Did the loan officer explain if the 40-point drop is temporary or if it actually stays that way for a while? I've heard conflicting things about how long a closed installment loan keeps dragging your score down. Just trying to figure out if this is a short-term hit or something you have to plan around for months.
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