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pjackson2289

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Pay off balance each month, paid off loan early, score went down 11 points, How is this possible?

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Yes, this is probably the most ridiculous way credit is calculated. Say you have a loan for $10,000 and you have been paying it off on time for 2 years. You have $6,000 left to pay on it, this makes the credit system shows you have $4,000 available credit, even though it's just you paying off the balance.

But say you pay off the rest. Now instead of the "$4,000 available credit", you have closed your loan account by paying it off, losing that credit in the eyes of the system.

It is the reverse of increasing your credit limit on a credit card.

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