My mortgage algorithm flagged me as high risk after I paid off my car early

Last month I paid off my car loan 18 months early and suddenly my credit monitoring app dropped my score 22 points with no explanation. Called the bank and found out their risk model penalizes 'account closure' as a negative signal, has anyone else seen this kind of backwards logic from these automated systems?

3 comments

3 Comments

nguyen.blake1mo ago

Whoa, they penalized you for paying off debt early? That is completely insane.

irisowens1mo agoTop Commenter

Oh man, I feel this one deep in my wallet. I once paid off a small personal loan a few months early and the bank acted like I'd committed a crime. They charged me a fee that was basically the same as the interest I saved, so I just ended up paying the same amount anyway. Guess I should have taken that bonus money and bought a lottery ticket instead, at least that would have been more fun to lose.

logan6581mo ago

Incredibly insane. "Penalized for paying off debt early" - man, that got me too. I had a car loan through some credit union and paid it off six months early because I got a bonus from a side job. They hit me with a prepayment penalty that ate up almost all the interest I thought I was saving. Felt like a real kick in the teeth. Did your friend just eat the fee or did they try to fight it?