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Posted in Auto Loans
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Question By
PerplexedinNY

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Auto loan decreased my credit score?
I recently paid off my auto loan, then took out another auto loan for a different vehicle. My score has decreased 27 points. I thought reducing debt and increasing the amount of accounts I have were both positive things as far as credit is concerned.. What am I missing?

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You reduced the "average age of your accounts", you most likely got a "hard inquiry" for opening the new loan, you closed a loan that was paid down, you opened a new loan that is most likely fully utilized (amount owed vs amount of loan). All of these actions are negative, not positive. I highly recommend that you spend an hour or two a day for the next month or two reading everything that you can on the subject of credit. The knowledge that you gain will be valuable to you for the rest of your life. Some hours of reading now are better than years of hardship later.

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