Explain Why My Credit Score Dropped After Paying Off a Loan

You did the responsible thing, paid off the loan, and your credit score dropped instead of climbing, which feels like the system is broken. It is not, but the reason is not obvious. This explains what credit scoring actually rewards, why closing an account can count against you, and whether it is worth worrying about.

My credit score dropped after I paid off a loan in full and I do not understand why, since I expected clearing debt to help it. Explain how credit scoring actually treats paid-off accounts, why closing an account can reduce your score, and what credit mix and account age have to do with it. Keep it practical and end with what, if anything, I should do about it.