Car payoff v. credit score

Car payoff v. credit score
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I just paid off my car; will it affect my credit score?


Hi Shari, and welcome to the NerdWallet community.

Paying off a debt can affect credit, yes. And in many cases, you can lose a few points. The reason is because you may have one fewer account being paid on time (or, if it was your only installment loan, a little less credit diversity.
In general, the route to a better credit score is using credit lightly and paying on time, every time. Even if you lose a few points, your score is likely to recover with time.