Why Did My Credit Score Fall After Paying My Loan?
As with many things dealing with credit lenders, this seems very counter-intuitive. If you’re paying your debts off, your credit score should go up, right?
Unfortunately, this isn’t always the case. The credit score system is a complex monster that takes many factors into account when generating your credit score, and there is any number of reasons that your credit score may have dropped instead of rise.
Common Reasons For A Lowered Credit Score After Paying A Loan
There are two general reasons that your credit score might have actually declined after paying an installment on your loan. These are:
• Different Credit Scores – There are three credit bureaus that handle your credit score, Experian, Trans-Union, and Equifax. Some lenders do not report to all of three of these, so your credit score from one bureau may be different from another, and your overall average between the three can also be different. Contact your lender to see which credit bureaus they report to.
• Outside Credit Impacts – Your loan alone is not the only thing reporting to the credit bureaus. If you’ve recently opened a credit card, rent-to-own account, or store credit account – or if you have recently acquired higher charges on any of these – your credit score may be affected.
Another factor that may lower your credit score is paying off a loan completely. It is possible that, by paying off the entire amount of the loan and thereby closing the account, your overall available credit has declined, thereby adversely affecting your credit score.
When To Call In The Arizona Credit Repair Experts
Credit Absolute has experience tracking down and eliminating false credit information that may be dragging down your credit score. If, for instance, you have an old medical bill that insurance should have covered but was denied without reason, a professional Arizona credit repair company can locate and help to eliminate the delinquent or derogatory charge.
If you are still having problems figuring out why your credit score is continuing to fall, contact Credit Absolute today, and get it taken care of sooner rather than later.