WOO-HOO!!!
Laughing Gas
Joined: Apr 2023
Posts: 908
Likes: 1,839
From: SE PA
The real reason your credit score dropped is because your credit utilization ratio changed. Credit utilization is about 30% of your credit score and it is calculated based upon your available credit vs how much you are using. Here is an example that will show you why yours dropped. You have a $100k mortgage with a $50k balance and $100k auto loan with a $10k balance, your credit utilization ratio is based upon $200k credit available which would be 30%. You pay off the auto loan now your available credit is only the $100k mortgage and with a $50k balance your credit utilization is now 50% and this hurts your credit score. This is why it is not always in your best interest to close out credit cards, unless you have a lot of them.
Mountain Pass
Joined: Sep 2005
Posts: 235
Likes: 84
From: West TN
I believe that everyone starts out at the top of the credit score and as life progresses, they eventually go down. Those who have very few credit cards, if any and have not taken out any loans may see very high scores, while those who took out loans and credit cards, paid them all off and have not applied for new loans or credit may not see the scores go up for quite some time. Only scores that go up and down are active credit accounts.
Hotshot
Joined: Jun 2003
Posts: 12,340
Likes: 4,361
From: SW VA
With who? Equifax offers the lowest score range of 280-850. The other two agencies only go down to 300.
Mountain Pass
Joined: Sep 2005
Posts: 235
Likes: 84
From: West TN
No idea, I just laughed when he told me. A quick bit of googling seems to suggest that 4 is a placeholder for no credit rating, which seems plausible enough...
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