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Uplinksc

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21 People Helped
Refinancing dropped score about 80 points?
I have about 12 active credit cards on my account, all perfect on time payments, average age of all is I think 3 years. I bought a car exactly a year ago from the beginning of October with my score being 588 at the time. In the past year, I brought it up to 730 by simply paying down balances and paying attention to statement dates. However, I refinanced my car from 12% to 4% and I can understand a drop in my score having an 8 month account close and taking on a new $20,000 account, but an 80 point drop? I am now at around 650 from 730 in a matter of 2 months and now it just still slowly keeps dropping. My utilization is around 28% total and 20% of that are financing offers that expire in 2017. I keep about 8 of my cards at 5% utilization, spreading bills to each to report a small balance each month for usage, and I have a few at 0% usage. Why is this refinancing hurting my score so much?

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Top Contributor
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28% is under 30% but it's still far from optimal.  You'd see much better results with lower revolving utilization.  Do you have any dergos aside from lates?  if so, those will keep your scores down.

Refinancing reduces your AAoA, you incur a hard pull and you add an installment with a high balance to loan ratio.  All of these things are not benficial though the impact depends a bit on your credit profile.  If you have 12 cards and a AAoA of 3 years then you probably also have a lot of recent credit seeking activity.

That said, where are you getting your AAoA and scores from?  CK only includes open accounts and therefore acutally provided AAoOA.  The FICO models used by most creditors use AAoA, not AAoOA.  If the scores you're referring to are the VantageScores provided by CK then keep in mind that most creditors use a FICO model.

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