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Posted in Student Loans
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beezie108

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Do paid-off loans become closed accounts and therefore hurt your score?
My credit has dropped about 20 points in the last few months and I the activity lists that two accounts were closed. BUT, these were loans that were paid off (one student and one auto) and the goal was to pay it off and get the debt settled. These still hurt my credit score though?

The only other change was one credit card lowered the credit $1600 because I don't use it.

Ideas on the closed loans? Thanks!

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The credit card reduction of credit limit is likely a factor because it lowered the amount of total available credit, which does affect your credit score. Paid off loans are positive marks not negative.

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Student & car loan are installment loans.

There's no real benefit to paying off something like a subsidized student loan early, especially if that student loan is your first bit of credit history.  Closed in good standing credit will fall off your report after 10 years.

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