I’ve Been Sold This Lie About Credit My Whole Life

Adding another lie to the things unlearned list…

Photo by Pickawood on Unsplash

Getting my finances together these days looked a lot like watching my credit score, making on-time credit card payments as well as working to increase my portfolio on Public, the investing app. Up until last week my credit score was in the mid 700’s. So how in the heck did it drop 52 points?! My car had recently caught fire in a Walmart parking lot and was completely totaled, resulting in my insurance company offering me a payout. I was current with every other bill so what gives? Reaching out to the credit report bureau, my only option was to request my credit report and dispute anything suspicious.

Jose Rodriguez, The Credit Dude, happened to be a guest on The Breakfast Club radio show today and debunked the biggest lie I’ve heard regarding credit. Angela Yee, one of the hosts of the show recently paid off a condo she bought and her credit score also dropped drastically. Like her, I thought once you paid off a big purchase you credit score shoots. up. I had been told that my whole life and it was completely false. And now I have a credit report coming in the mail to prove it.

The reasoning behind it makes sense, I guess. When you open up an installment loan, once you pay it off it essentially closes that account. By my insurance company paying off the loan…