Paid off 2 newer student loans…score dropped 50 points. What??

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It went down because you have less accounts now, also the average overall age of your accounts affects your score. So if paying these off lowered the average age of your accounts then that could be a contributing factor as well.


Credit scores bounce around, you haven’t screwed yourself at all. Keep paying your bills, save a good down payment and you’ll get a fine rate. Also, keep in mind that they won’t just look at your score number, they’ll look at your overall debt to income, which could either help or hurt you (not sure of you situation) and a bunch of other factors when they determine approval and interest rate. The different scoring models treat and weigh things differently. Vantage (used by CK) is different than Fico, which a lot of lenders use, and may be more sensitive to total open accounts. We can all get free credit reports regularly from the 3 bureaus as part of the current economic relief programs. I would check that out if you’re concerned. CK is good for situational awareness but it’s not 100% accurate to what most lenders actually use, depending on what you’re trying to buy (house, auto, etc). Else, just keep paying your bills on time and save a good 20% to put down.


The good news is realistically over 740 your interest rate will be the same, the lowest possible by that lender. Have an 830? Great, you are still getting the same rate as someone with a 745. The scores above 800 usually represent that “this person is actively in a cycle of credit that is most profitable to lenders right now, at this very moment they are generating them money”.


The moment you realize credit scores are a scam. When a scoring system is in place that literally no can completely explain, it’s probably BS.


I’m not saying this is a *good* explanation, and I think the whole thing is BS, but here’s how I’ve had it explained to me. Let’s say you take out a 10 year loan and pay it off entirely in less than 2. To you and I, this means we’re very financially responsible! But to your credit score, it says a few things: * Your income or budgeting aren’t consistent over time, because you expected to pay over 10 years and somehow were able to pay earlier. That makes you slightly higher risk than someone who is perfectly predictable. * You’re less of a good investment to a lender because that is years of interest that they can now no longer make from you. About a decade ago, I paid off a 2 year auto loan within a few months of purchase, and it made a big drop in my credit score. Shortly after that, I got married. Every line of credit since then has been joint with my wife, and my credit score has consistently been slightly lower than my wife’s ever since that auto loan.