Credit score dropped 120 points

Credit score dropped 120 points
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I’m 21 years old and I have had my credit score up to 680ish in credit Karma and equifax at 740. recently I paid my car off and it dropped my score by about 20 points. it was my oldest account. Now my credit age is around 6 months ( when I opened my first credit card). Recently I was going to buy a car out of state, took out a loan after an agreed upon price and went to see the car. It was trash compared to the pictures and what they told me so I just went home and repaid the loan and the account was closed. No big deal I thought until it dropped my credit score by 120 points! What in the world! What do I do about this or how do I now rebuild from a 530 credit score. I was planning on getting a house within the next year, but it doesn’t look that way now…


Wow, @rs.blakesta310, that is a huge drop! Paying off a loan can drop your scores slightly, but nowhere near what you’ve just experienced. Please take a look at your credit reports to see if an account is being reported as 30 days or more overdue – that’s the usual culprit when scores drop that much.


I looked at all three of my credit reports and I have no late payments ever. I have my student loans in deferment which adds up to be around 10k ( didn’t affect my score when I got them really). I can’t see why my score dropped so dramatically. I have no dings other than my small credit age of 6 months now. I don’t understand why in the world my credit would be so low considering I have always made all of my payments on time or early.


Definitely something weird going on. Can you tell me which score dropped? You mentioned Equifax and CK, which provides VantageScores from Equifax and TransUnion…did all those scores drop? By the same amount?

Typically the service that delivers you the score will also provide some clue when there’s a change. Did CK or Equifax provide any guidance?


My two vantage scores from CK both dropped roughly 120 -130 points. My FICO from Experian dropped 50 points. As far as I can tell there is nothing wrong with all three of my credit reports from the bureaus. Just taking out that car loan and paying it off killed my score for some reason. I know that my credit age dropped, but even then it still shouldn’t be so low… I’m not sure what to do here… on CK it shows that on all three things that impact the vantage score the most (Payment history, credit use, and derogatory marks) I am in the green all the way. I have 6 month credit age and I have some hard inquires not too many… a few from when I was looking at that car so from the same day. One from my apartment, and one for my credit card. The number of accounts I have open it says are low, but I have no reason to open any other accounts at the moment.

PS: I just looked on CK and it shows that the day my score dropped 122 points is the day my credit card utilization went down. I usually never hold a balance on my card, but I left it on there for a week or so and I have auto payments set up just in case I forget. So, $20 was reported to be my utilization of my $300 limit. but then it reported that $20 being paid and my utilization going back down to 0% on the same day my score tanked.

PPS: Never have had a late payment and this was not a late payment situation as confirmed on my credit reports.


Hey @rs.blakesta310, I’ve been following along and your situation just keeps getting more interesting.

I’m starting to wonder if the VantageScore model interpreted the opening and quick closing of the loan as a marker of increasing financial instability? It’s interesting that VantageScore dinged you a lot more than FICO did.

Maybe the VantageScore algorithm is sensitive to a combo of short credit history and an unusual blip like a short-lived loan. It could be it looked at this unusal case and basically thought, “Hmmm. Not much to go on here, this person doesn’t have a long track record … and what’s going on with that loan? Maybe this person’s finances are falling apart and this is the first indication. We’d better warn potential creditors by dropping the score.”

Since you have ruled out the more-common issues — a late payment, high utilization, tons of hard inquiries — maybe it’s that? I’ll be very interested to see how quickly your scores rebound. How recently was the drop, has it been a month yet?


The score drop happened on August 23rd (TransUnion) and 19th (Equifax).


Interesting. OK, well if you are not in immediate need of something that requires good credit, you could just wait and see what happens this mont. Maybe the VantageScore algorithm will ease off as it sees the loan open/close was not the leading edge of financial chaos. I wouldn’t be surprised if your score start edging back up. Keep us posted! :slight_smile:


I will! I am not in immediate need of anything at the moment, but buying a house is in my future in the next year or so. I am looking for a little house in the city school district near me so I can rent it out in a couple of years when I am ready to move out of it.


Alright, update time. I had a huge increase in my credit scores today. TransUnion went up by 117 points, making it 655 now and my Equifax went up by 110 points making it 659 now! It needs work still to get back where it was before, but at least I am much closer to having an okay credit score at this point.


Great news! Glad to see that you are seeing results.


Update: My 680 credit score only lasted 1 month before absolutely tanking again… This time my Captial One Platinum card went from a $300 limit to $500 (no credit inquiry just 5 months of on time payments). My credit score dropped 137 points… Mint and Experian both show that my credit utilization went from 8% to 0% since I paid my CC bill ( I just use it for gas and groceries and then pay it off the same week or always in full every month). So, Credit utilization went down, available credit went up and my credit score dropped by 137 points. What is up with my credit!?

 It is because you have a limited credit history. Giving you an increase is currently a risk not a reward. It is a balancing act between many factors. As you gain credit cards and increase limits, you will build trust and credit power. It takes time to tip the scale. Check your scores less often at first and do what your supposed to do. Keep your inquiries low and keep your credit card open and under 50 percent utilizationand. Build your history. 

 People like to think the number is King but it's more of a ratio. Credit history vs risk factor. A new credit holder will have an 800 credit score but no history making them a huge risk. Someone with a 720 credit score and 10 years of solid credit history will be a low risk. Build slowly and it will pay off.