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Posted in Auto Loans
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Question By
MBW57

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Why would my account be CLOSED and count against me if I paid off my loan?
My Credit Score went down because I paid off my car loan and it says I closed an account.

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Please take the time to read the articles on this site so you can learn how credit works.  That is, after all, the purpose of Credit Karma because too many people are totally clueless about the subject. The lender provided the money for the car loan, and you agreed to pay it back, which you did in the time specified.  Since the contract was completed, the account was closed.  This was not a revolving charge account where you have a certain maximum credit limit for an indefinite period as long as you keep the paymebnts up.    

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You are not being penalized due to the "closed" status, you were penalized because you closed an account. It is normal for scores to decrease when closing accounts. Closed is not a negative thing, the lack of an open account is.

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