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Posted in Student Loans
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tiffancy89

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I just paid off a loan and my credit dropped. How long will it take to come back up?
I just recently paid off my student loan so that I could afford my first car loan. I checked my score today hoping to see it increase, however, it decreased by 27 pts! I understand that closing a long standing account negatively effects my score but I didn't think it would take such a serious hit! How long will it take to come back up? As mentioned I am trying to buy a car soon and will need to have slightly better credit to do so.

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Hard to say if it will come back up or not.  When you pay off a loan, you lose more than the age of the account, you also mess up your utilization, which is a big part of your credit score.  It is impossible to say what you need to do without a thorough review of your credit report, but if you don't already, get a credit card and keep a balance of 1-3% of the limit on it at all times.  That will increase your score.

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