cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 2

Paid off auto loan

I was excited to pay off my auto loan because I thought my credit score would jump. Instead it went down due to a drop in accounts & a decreased avg. age of credit. From what I understand, after you pay off an account it's supposed to hang around and influence your credit for 6 to 10 years, but my capital one auto loan went away the day after I paid it off. 

 

How can I get some recognition from my credit score reporters that I did have that 7 year credit line? Does this line of thinking even make sense ??

 

 

2 Comments
Level 3

Paid off auto loan

An auto loan isn't in the same category as credit cards. Loans are separate so they do not contribute to your "number of accounts."

Level 2

Paid off auto loan

From what I understand,  the credit score is weighted for existing debt that is in a current payment status.   When you pay off a loan that has been paid on a timely basis,   the debt will disappear and your score will probably go down.    People with a lot of debt who make their payments tend to have higher credit scores than those without debt.    I am retired and no longer have any debt at all.   My score dropped when I paid off my mortgage and car loans even though I have a very large investment portfolio.   This might seem to be a little bit of a bummer,  but good lenders will recognize a honest borrower who has a reasonable debt load and can make the payments.   Don't worry about it.    Most of all,  don't get more debt just to improve your score.