Why did my credit score drop when I paid off my car?
Credit utilization is one reason your credit score could drop a little after you pay off your debt. Paying off an installment loan, like a car loan or student loan, can help your finances but might ding your score. That’s because it typically results in fewer accounts.
What to do when you paid off your car?
One way to pay off your car loan early is to make one lump payment. Contact your lender to find out your car loan payoff amount and ask how to submit it. The payoff amount includes your loan balance and any interest or fees you owe. You can also pay more than the minimum amount due each month.
Should you trade in a paid off car?
But if you still owe money on your car loan and can’t pay it off now, you might want to wait to sell or trade in your car. Otherwise, you might not be able to sell your car privately. Some dealers might pay off your old loan if you trade in your car.
Photo in the article by “Flickr”