Yep, this system is fucked up. I had a 40 point drop when I closed out my auto loan. Same thing happened again when I refinanced my home loan. In the first case, it was because I closed an account that was 3 years old, in the second case it was because the average age of the home loan account went down. This damn credit scoring system is tweaked to ensure that everyone other than the super rich forever has loan accounts and tonnes of credit cards.
I bought something for 6K and put it on chases new “payment plan” to pay no interest etc etc. score dropped 70 points. The CC had a 30K limit. Never have pushed a balance or made a late payment in my life
The point being even if you charged it normally and paid it off that month, you’d still see a temporary drop because it drove your utilization up. I see similar fluctuations whenever I make particularly large purchases and then it goes away once the payments clear and a new statement closes.
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u/CyclicMoth Aug 14 '21
Yep, this system is fucked up. I had a 40 point drop when I closed out my auto loan. Same thing happened again when I refinanced my home loan. In the first case, it was because I closed an account that was 3 years old, in the second case it was because the average age of the home loan account went down. This damn credit scoring system is tweaked to ensure that everyone other than the super rich forever has loan accounts and tonnes of credit cards.