06/29/2023
Paying off a car loan can cause a temporary decrease in credit score due to changes in credit utilization and credit mix.
When you repay a loan, your credit utilization ratio decreases because you are using less available credit.
This can cause a short-term dip in your credit score.
Additionally, closing a loan account can also impact your credit mix, which is the variety of credit types you have. This can also contribute to a decrease in your score.
However, over time, your score should recover and potentially even improve if you continue to make on-time payments on your other credit obligations.
For help understanding your credit and how to improve your score, give me a call and Let's Talk Numbers!
Tonett Winston - Certified Credit Consultant
317-790-8024
[email protected]