Yes, but here’s why you shouldn’t panic
Why Your Score Could Drop
After paying off debt
If you’ve been working toward paying down debt, dreaming about the moment you can feel the weight lift off your shoulders, we’d like to give you a heads-up about something you may not realize. Your credit score could go down.
We know — it’s confusing that there’d be negative repercussions from paying off your credit card debt or car loan. The way people talk about the importance of getting out of debt, you’d think lenders, your financial advisor and Dave Ramsey would all come together to throw you a giant party to mark the occasion.
There are a few reasons this can happen, but it’s usually no reason to panic. Most of the time it’s a mild and temporary drop. Here’s why you may see a credit score change after Dave is done cleaning up the confetti.
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