Why does credit score drop after paying off a loan?
In: Other
Because the banks want to know you can pay them interest over time.
I recently bought a new truck and the dealership played hardball on the loan and gave me a 7.8% loan with a 838 credit score according to their credit pull.
I paid off the entire balance of the loan a month later with cash savings and my credit score went down twice, once from their inquiry (first credit inquiry in over 5 years) and again when I paid off the loan. Credit scores are stupid.
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