I paid off a car and for some reason, my credit score is going down. I havent opened any credit cards, or racked up any debt besides my car payment and for some reason, my credit score went down 44 points in the last 7 months. I dont know what to do. I own no credit cards and I have no student loans, so I have no idea WHY my credit score went down and is SO LOW. I have a car, which I pay on every month and a few other $200-$300 debts (like literally 3 others) that are old...from 2013 and 2014.
Can someone please help me with what is going on here? I want to see someone that can assist me with debt, but they charge money and I live paycheck to paycheck. I am 48 years old and cant even get a Walmart card if I tried. Credit score is THAT BAD.
To start off, have you reviewed your credit score information within Turbo? You will be able to see total accounts, derogatory marks, credit inquiries, average age of credit, credit utilization, and how on-time your payments are. Each of these categories will give you a rating based on whether they are helping or hurting your score. Be sure to check the, "Total Accounts," section to determine if there are open lines of credit that you may not be aware of. We should make sure your credit report is accurate before moving on to more general causes that may be affecting your score. Let me know how that goes and we'll continue from there.
In your instance, paying off that loan hurt you. Credit scoring looks for use of credit and good use of it. By having no debt, you're showing no credit usage. Yes, your credit history remains for some time and has some affect on your score but mostly it comes from current and the short term.
Scoring looks at your total accounts and time you've had those accounts and your account mix (personal loans, student loans, mortgage, autoloans, credit cards). If your total accounts went from 1 to 0, you can see that's a problem because now it appears you have no credit. And maybe you had a 6 year timeframe on that autoloan well that means when you made that last payment you had 6 years of active credit history. Once its closed out you go to ZERO. Again, the algorithm has no choice but to lower your score. Next your account mix. Its poor if all you have is an autoloan and when that closes, you have 0 types of credit.
So yes it tends to look at what you have now but if you've had bankruptcy or missed payments, that haunts you for a long time.
If you cant get a walmart cc then you need to go to any bank and get a secured credit card. You have to put up collateral (a few 100 bucks cash) to protect the bank. Then just use it for cash or groceries and keep it paid off. Your score will slowly rise because you have an active account. Never close it.
It's not easy. You have to keep at it.