Hi @chinooknewton,
Was your car recently financed? If you paid off your loan in a lump sum during the sale process, it's possible that your credit score will decline, especially if done early in the life of the loan. Your credit score depends on many factors, including how you choose to repay borrowed money. Having a mix of installment accounts (home, auto, and personal) and revolving accounts (credit cards), both with on-time payments, will help to improve your score. If you had a good payment history and paid the loan off in the term you initially agreed to (such as 60 or 72 months), and then sold your car, it should be a positive impact to your credit score.
Keep in mind that missing a car payment or missing other financial obligations could be worse for your credit, so it's important to understand the overall impact and make the decision that's right for you, which may mean selling a car before paying it off. Many people sell their cars or trade them in for something else with new financing before the initial loan is paid off. This scenario may not impact your credit because you would be maintaining an installment account and building payment history. One downside here to consider would be what this new loan does to your average age of credit. The longer you can keep accounts open, the better. It gives lenders more confidence in your ability to repay.
