I recently made an extra payment toward my car loan principal, but my credit score dropped from 760 to 750. Here’s the situation:
- I have a simple interest loan. When I make payments, I can choose to apply extra money toward the principal.
- My monthly payment is $390, and my balance was $17,800. Last month, I paid $1,700 in total (regular payment + extra toward principal).
- My credit score dropped 10 points after this payment.
- The loan started at the end of July.
- I’ve been making extra principal payments every month, and my score went up the previous month.
There are no negatives on my credit cards, and both are under 20% utilization. Why would my score drop this month after making extra payments?