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Posted in Credit Scores
Why the heck did my score drop 48 points in one month with only positive changes to accounts?
My score had been bordering on good/excellent. I just paid off one old (closed) account, and finished paying off a car loan. Also paid off about $7k in other credit card debt. And my transrisk score dropped by 48 points! But my Vantage score shot UP. What would cause this?
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Question By
sentner

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Most Helpful Response
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 Hi Sentner,

Your score dropped because you paid off your car loan.  The average length of your credit history includes open loans, and when this was closed, it no longer was included in it, which meant your average account age went down.  You'll see as time goes on that your score will go back up.  Great job on getting rid of the debt!

Response by
ksumma

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Helpful to 5 out of 5 people

This is definitely part of the reason. Also Vantage score has different weights than the traditional model. Vantage values recent accounts and debt load more. I think the combination of those things explain the differences you are seeing. 

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Reply by
hardeight

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Thanks ksumma's that is helpful crazy but helpful one card is paid of another 0 interest transfer balance from tips from this site ugh, and 2 companies viewed my score why do they drop your score for that this system stinks like mosts things I am not interested in looking on this or any site for a while , Only to prevent fraud ....

Reply by
bestus

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Helpful to 7 out of 7 people

i think there is some problem with the site. i just updated my score and it dropped dramatically, stating that my total accounts have an increase of  $642. there is no such thing!!!! only payments have been made to my credit cards and on time as well.  something is definitely wrong with this site. normally i have no issues with creditkarma, but i think someone needs to check this out.  even the balances on my accounts are the same as they were the last time i checked in about two weeks ago.

Response by
trishwil

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Helpful to 3 out of 3 people

Keep in mind that the site is pulling information from a credit burea, which is getting information only as quickly as the creditors send it to them.  The problem is not with this site, it's with the credit burea system.

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Reply by
jarena82

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Helpful to 4 out of 5 people

I also find that the amounts shown that I owe have been paid off some time - sometimes weeks - ago, despite it telling me it's "updating" my account when I click on the update button.  I don't have much faith in this site anymore, it's not accurate.

Reply by
ratt57

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I am very, very confused. I have four credit cards I've been trying to work on... got a big project at work and made enough to pay two of them down to a zero balance. I never CLOSED them; I want them open showing available credit but not being utilized.

My score on here dropped by 23 points!!!! I am so confused. My utilization decreased by 15%, which is nice. But why would I get such a score penalty for doing something good?

To reiterate: None of my cards has been closed out. Just a zero balance on two of them now. No other changes with the car loan or anything else I could possibly think of. I've been working really hard bc I want to buy a home...wish I had a better idea of my true score. :(

Response by
mozzergrrrl

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just looked into some things and apparently, i smell a rat.  transunion will no longer sell you a single credit report, only through  a subscription for credit montioring.  am i correct when i say that this site is run by transunion??  so i assume they are gonna throw some crazy dip in a score to pique our curiousity and force us to buy into the scam just to get a copy of our OWN credit report!!!!  what a total rip off.  so shady. wow creditkarma, if that is your scam i am so embarrassed after telling everyone what a great site this is.  shame on you

Response by
trishwil

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Helpful to 3 out of 4 people

Trish, I've had the exact same thing happen the last two weeks. I had a 806 that has stayed 806 for over a year now. Suddenly, for no reason, it plummets to 749, a 57 point drop. I've paid in November and December exactly like I've always done, paid the entire balance on my VISA, and paid a big chunk of principle off my home equity account. No borrowing, no lates, something is terribly wrong here...

Reply by
eastcane

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Helpful to 1 out of 1 people

same here. Now I see people plugging score navigator. tried it. my score there (transunion) was different from here and from the report I just pulled. Both creditkarma and score navigator use or are run by transunion. Coincidence that nothing matches within 2 days of each other??

Reply by
dennywagner

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9 People Helped

I had the exact same thing happen, I monitor my credit monthly with a paid service and my credit is 50 point higher and has ben that way for over a year.

I think that Trish is onto something.....I almost fell for it, instead I am going to cancel this scam.

Reply by
cunninghamlally

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Helpful to 7 out of 9 people

You can get a free credit report once a year without having to purchase anything. I think the site is annualcreditreport.com and it gives you all three bureaus.

Response by
yokidd20

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Helpful to 3 out of 3 people

and yes you have to wait exactly 1 yeear and one day fromthe lst freebie in order to get it.along with transunion is a apin in the ***.. I always have to send in proof of this that and everything else just to get the **** report. even if nothing changed.

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Reply by
happycat2010

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Helpful to 2 out of 2 people

Your credit score usually drops if you pay off old account, especially if they went to a collection agency! I found out that it is better not top pay of debt collectors as it will affect my credit score for 2 years after I have paid them off! By doing the right thing, I am doing the wrong thing and getting penilized by the credit bureas! That is just crazy! But let us look at this, it is all for the benifits of the banks! The banks are the ones who created the creait bureas for their benefits, it only benefits the banks if your credit score is low, so they can make you pay more! This is such a terrible discrimination to all in the United States of America! I always thought discrimination was against the constitution!

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Response by
1MeMyselfandI

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Helpful to 3 out of 4 people

well  be careful with freecreditscore.com cause they will charge your credit card every month for that... you gotta read the fine print.. after you become a member you have to cancel it after a certain amount of days or they will charge you!! 

Response by
ilovebabydalton

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Helpful to 3 out of 4 people

My credit score dropped extremely low,  all credit cards have a zero balance and it isn't showing on this website as zero.  I am sure it will correct itself. Does the credit card companies take a while to report credit balance differences?  Does Credit Karma wait until the end of the month to post these changes?  This website opens yours eyes to your credit background and is addicting to log on to daily.  Thanks for a great website! 

Response by
jeffatoy

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Helpful to 4 out of 4 people

I paid my car off and mine went down.  It's dang if you do and dang if you don't .  Doesn't seem fair.

Reply by
par75043

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Helpful to 1 out of 1 people

Can someone tell me if it hurts our credit score to constantly update it on this site, creditkarma.com? B/c I update it quite often, sometimes every other day.

Also, I will be paying off my car loan very soon. However, I was under the impression that my score should go up b/c I have less debt? Is this not so? Does that offset the fact that it becomes a closed account which takes points off?  I am so confused. Please answer this for me if you can.

Response by
LATONYALAWRENCE

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Helpful to 3 out of 4 people

LATONYALAWRENCE, it does not affect your score at all to check it on creditkarma, even if you do it every day. They use what are called "soft inquiries" to pull your credit report, which are inquiries that only you can see and don't impact your score at all no matter how many of them you have.  It is the same type of inquiry that a credit card company uses before they mail you ads for their credit cards.

As far as paying off your car loan, you'd be surprised to hear that it generally never has a positive impact on your score.  The decrease in debt is negligible, because your principal balance is probably already very low (if you almost have it paid off), and also the credit scoring formula doesn't weigh auto and mortgage debt very heavily in the first place.  As evidence of this, I added a $230,000 mortgage to my credit report recently, and my score went up, because the act of having a mortgage in the first place is more important than how high tthe balance is.  Credit card debt is by far the most heavily weighted out of all the debt types.  Additionally, when your auto loan account gets closed, it reduced your "variety of credit types", because you no longer have an open installment loan on your report, which is considered one of the 4 types of credit (mortgage, installment, retail credit cards, and regular credit cards).  Your variety of credit types makes up about 10% of your score.  And finally, your "average age of open credit lines" decreases when your loan account closes.  However, your score will likely not drop very much, and will pick back up over time. You can speed up the process by applying funds you would have paid towards your car loan after it closes towards your credit card debt (if you have any) until you get your credit card usage below 10%.  Hope that helps.

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Reply by
coreysw12

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you get a free credit score from freecreditscore.com

Response by
gemonster

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the scores you get from freecreditscore, atleast freescore.com are a lot different then if you have a mortgage company pull your report. Mine were all several points lower through the mortgage company.

Reply by
richardrelena

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