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Question By
hollisfletcher

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Drop in score, nothing negative
Student loan paid off in feb, now in March score drops 45 points. Nothing else negative, credit card utilization has drop 60% in the past 6 months. I'm confused, is it paying off the student loan and if so why a month for the score to drop?

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Only in America

Helpful to 6 out of 6 people

There are no "Bonus Points" awarded to your credit score for paying off a loan.  The status on a paid loan is changed to "Closed" and can actually have a negative impact on your credit score.

45 points seems to be really excessive, but it's probably only temporary.  Hopefully you'll start to realize a slow, steady climb and get most of that back this year.

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Something Similar

Helpful to 8 out of 10 people

I had something similar happen to me on a lessor scale. I paid off a 575 balance on a credit card, had on time payment history, and the credit limits on my credit cards were increasing as a result of being a good girl and paying ontime. 

However, despite having done nothing logical to cause my score to drop it did. In fact, my score dropped a good 20-30 pts and stayed the same for months. I tried to use the credit simulator on this site, but it showed that nothing I could would raise the score...In fact, it was set to drop even if I staid on time with my bills and paid more things off.

Although, just recently I bought another vehicle and traded our second in....The first pull on my credit for the first vehicle said my credit score was 622....The dealership whom I bought the second car from said my score was a 688 just 2 days ago....Credit Karma says my score is a 674 today.

I tried the credit simulator again and it shows that my score is set to go back down even if I have an ontme payment history. That said, credit is a tricky thing, and if I don't see improvement soon I might just look into a credit cleaning service and see what they suggest. 

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Reply by
Addison170

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Helpful to 21 out of 25 people

Y'all realize that the scores here are fake, right?  The score you see here is never, ever going to match up or be close to scores you get elsewhere.  Only score that matters is FICO, and you have to either have a Discover IT card or purchase your FICO score from www.myfico.com (or apply for a mortgage) to see what your FICO score is.  It really sucks for the consumer because all these websites and all the bureaus play games with their credit scores, keeping us in the dark.  

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Helpful to 5 out of 5 people

The reason your credit score dropped is because when you paid off the loan, it closed the account. That, in turn, caused your credit utilization to increase due to having less credit available. As long as you continue to pay all your other credit accounts off on-time, this will rebound in a short period of time.

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Helpful to 2 out of 2 people

Even your FICO scores that you purchase are not correct. I bought all 3 from myfico.com and then applied for a mortgage. The FICO scores the banks use for mortgages are anywhere from 80-100 points lower than the scores I purchased. So, essentially, no one has any idea what their scores actually are and no one will tell you. 

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CreditKarma score is so far off!

Helpful to 3 out of 4 people

My Experian score, as of yesterday, is 849.  CKarma scores me 787.  The two other major reporting institutions are in the 800's as well.  The amount of income on your form does not allow for net (non taxable income) and only gross.  That, in my humble opinion, needs to be corrected to ascertain a more accurate number from CreditKarma.com.

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Totally debt free and my score drops....

Helpful to 1 out of 1 people

I am beginning to wonder how accurate the credit score system really is. I had been in debt for 15+ years and 8 years ago I had paid off all of my credit cards and have since then kept a 0 balance on the two that I kept. (A girl has to have a Victoria Secrets card, lol.) A year ago, I paid off my home equity load, which was paid off 5 years earlier than mapped. So why would my score only be 790. Don't get it at all.

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I've experienced the same thing with a student loan. Negative information from that account fell off my report. My score dropped 75 points. The expired missed payment was the only change. Utilization is the same. Account numbers are the same. Inquiries the same. NO negative information what-so-ever. Never a missed payment now.           So, to recap,a missed payment came off my report, and my score went from 725, to 650, overnight.

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