Credit Karma
 

I paid off my car loan in early July. It wasn't scheduled to be done until Nov 2017. The bank closed the auto loan account obviously, and whammo...Credit Karma is saying I took a 60-something point hit

WTF.

That's going to take an insane amount of time to heal 60 points.

Did the bank report the account closing wrong, as if it were closed for a bad reason? Is Credit Karma full of shit?

It changes your utilization. 30% of your credit is factored in with how much you owe and how much credit you are using. It's the stupidest thing ever. Then entire credit system is broken and takes way to long to recover from something.

A quick Google search tells me that this is normal. Closed accounts (even paid in full ones) lower your score. It is stupid, I agree, but that is how it works.

That's nuts.

I get the idea of the account closing, etc. But Jesus. Its a car loan, they should be able to close it with an "atta boy" for being early. ****ing tanking my credit score for working ahead is the dumbest shit.

Welcome to America.

Don't borrow money and it doesn't matter.

I'm not a credit score expert by any means, but I always kind of thought of it this way:

-- WE think the score should reflect how credit-worthy a person is. Are they a reliable payer? Do they satisfy their obligations? Can they manage money well?

-- the credit score industry is actually set up to tell banks if you are a GOOD BORROWER, which means that you won't default on the loan, are a good credit risk, and -- importantly to them -- THEY MAKE EVERY ****ING DIME THEY ARE SUPPOSED TO MAKE OFF YOUR ASS.

So you close an account early, that's BAD, because the BANK DIDN'T GET ALL THOSE EXTRA MONTHS OF INTEREST PAYMENTS.

Now, I may be completely off base here, but that is how I **think** ti works, kinda sorta.

Can someone enlighten us on whether I'm anywhere close to right?

My wife would not like me having a sugar momma, so....

From what I've read about it, paying off early or not really has little to do with the credit hit. Its the fact that a diversified credit account was closed. Kind of a damned if you do, damned if you don't. But the banks should be allowed to close the account "honorably" so you aren't getting the hit regardless of what you do.

Open a credit card and get your ratio back. I always pay credit card in full each month and it keeps my score pretty high.

Could be because Credit Karma switched to a much more volatile system somewhat recently. I have seen my score waver significantly for what I consider to be very trivial reasons. The good thing, though, is that your score also tends to spring back quickly. If your credit card company (or bank account) offers a free FICO score then check that often. Those tend to be less volatile even though they are probably using the same system or one that is very similar.

Yeah, having different types of accounts helps your score.

It's ****ing dumb

Credit Karma
 

It probably increased your debt ratio.

Never close an account due to this fact.

Are you saying he should have never paid the vehicle off?