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Have You Seen Your Credit Score Drop After Paying Off Debt?

Have You Seen Your Credit Score Drop After Paying Off Debt?
Here are four reasons why your credit score may drop after you pay off debt.

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Yes, when I paid off my car and credit card in 2020, my credit score decreased temporarily. Three months later, my credit score increased much higher than before the drop! This September, I sold my house and paid off all credit cards, student loans and of course the home loan. My credit score is dropping again and I’m looking forward to it skyrocketing.  

I have seen my credit score either unchanged or drop. I learned the hard way not to close down a credit card even after clearing the debt because your score takes a hit because you lose the available credit limit. Debtors mainly are looking at how you are spending and your repayment schedule. The trick is to have open account with only a little bit used of the credit limit. When I see a creditor decrease my credit limit, I turn around and decrease the use of the that card even if I don’t use it and I eliminate the debt on it. I make them beg me to use card and I will make a minor purchase which is easily paid off. That way I show positive activity and my payment records are kept on high status. I still am working on lowering my debt ratio but not to lose the credit limit.

Yes, that included legal action proving I had made my payments (had the canceled checks no less and they still swore in court that I had not paid) with US Bank in the 60s. The judge told them to pound sand but USB dinged me anyway and it took years to get back over 700.

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