the installment loan trap thats droppin scores 40 points the second u pay it off 💎

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real shit. yall stay focused on payin debt OFF thinkin its the move. then u finish off ur car loan or ur Self credit builder loan and ur score drops 30 to 50 points the next month and u sittin there confused askin wat happened.

heres wat happened.

ur credit mix is 10% of ur fico score. bureaus wanna see u jugglin BOTH revolvin (cards) AND installment (loans, autos, mortgages) at the same time. when u close out ur LAST active installment loan ur file got nothin but credit cards on it. mix takes a L. score drops.

worse than that. ur installment loan utilization was prob 20 to 30% by the time u paid it off. low. healthy. fico loved that. now its 0 cause u dont got one no more. and a paid closed account stops reportin new positive data. it just sits there frozen.

most people learn this the hard way the month they think they done celebratin.

the play. BEFORE u kill that last installment loan:

first. open a brand new credit builder loan somewhere else. Self. Kovo. CreditStrong. SeedFi. any of em. like $25 a month. no hard inquiry to start. takes 5 mins

second. let that new account post to all 3 bureaus. usually 30 to 45 days. now u got an active installment loan on ur file ready to take over

third. NOW pay off the old one. the new one keeps ur installment mix alive AND keeps positive data flowin into ur file every month

fourth. if u about to apply for a mortgage or auto in the next 6 months. time this even tighter. u DONT want ur installment account hittin 0 right before a lender pulls u

real talk. ive seen people stack a 720 then pay off they car loan thinkin they bout to hit 750. dropped to 680 instead fashoo. same person if they kept a $25/mo Self loan runnin in the background woulda smoked thru 750 easy.

the broke advice is pay it all off. the real game is keep the right kinda debt active for the score. two completely different plays.

anybody about to pay off a car loan or builder loan in the next 90 days? drop the lender below n me and my team gonna tell u the exact move so u dont fumble the score 👇

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the installment loan trap thats droppin scores 40 points the second u pay it off 💎