At what time does an auto loan become "matured" on your report?

[Broke_Triathlete]

Long story short, my dad has cancer and has been taking the city bus to his chemo treatments. He commented that he's tired of taking the bus to his chemo and mentioned he was thinking about stopping the treatments. I decided to take on a car loan so I can give him my perfectly running Jeep, and I'm also paying for his insurance. I feel like I did something that a lot of people either wouldn't do or not in a position to do. I'm not fishing for compliments as that's not the point of this post. I'm regretful because he doesn't seem like he appreciates it and in fact it's opened him up to asking me for MORE money, MORE favors, etc. As if the car wasn't "enough". 

My loan is only 2 months old, $19.2K @ 7.8%. My monthly payment is $341. I detest car payments but in a round about way I felt I was doing the right thing and now I completely regret it. Up to that point my student loans was my only debt, and now I doubled it with the car loan. 

The good news is I have almost enough money sitting in savings to pay the car off and be done with it. It's a double edged sword because that was earmarked for my student loans to become debt free, but whatever.

I'm not one to carry debt and pay interest to improve my score, but should I keep it open for at least a year? At what point does an auto loan become mature on the report? Is it the same time as a credit card (2 years)? 

Thanks as always!

[Anonymous]

Auto loans are installment loans, as are student loans in most cases.

Credit cards are revolving debt, and are scored slightly differently.

There is no real benefit to keeping an auto loan for your scoring, as you already have installment debt on your file (your student loans). 

It would benefit you to have it if you paid off/eliminated your other installment debt, but if it's one or the other, choose the one carrying less interest (which I'm guessing is going to be the student loans in your case) and eliminate the other one.  You may notice your score rise and fall in the next couple of months after doing so, but it will eventually settle back close to where you were, if not slightly above that.

Paying off the car note will not erase it from your history, and so as a sort of consolation prize your Auto FICOs will benefit from a paid-off car loan.  The "history" of having had the loan and its perfect (even if shortened) payment history will remain on your report for years to come.

[surferchris]

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@Anonymous wrote:

Auto loans are installment loans, as are student loans in most cases.

Credit cards are revolving debt, and are scored slightly differently.

There is no real benefit to keeping an auto loan for your scoring, as you already have installment debt on your file (your student loans). 

It would benefit you to have it if you paid off/eliminated your other installment debt, but if it's one or the other, choose the one carrying less interest (which I'm guessing is going to be the student loans in your case) and eliminate the other one.  You may notice your score rise and fall in the next couple of months after doing so, but it will eventually settle back close to where you were, if not slightly above that.

Paying off the car note will not erase it from your history, and so as a sort of consolation prize your Auto FICOs will benefit from a paid-off car loan.  The "history" of having had the loan and its perfect (even if shortened) payment history will remain on your report for years to come.

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Agreed, good advice.

[Broke_Triathlete]

Awesome. That's great to know. Yea it'd definitely be better to pay off my car loan. It's nearly 8% while my student loans are like 3.65%. I do know it won't erase it from my report and should stay for 10 years. I just wasn't sure if there was a fringe scoring benefit from keeping it open for say a year or so, and I'm not worried about the score flucutation for a few months if that happens. Thank you for mentioning that! I know they are categorized the same but wasn't sure for whatever reason if keeping it would help for "X" amount of months.

Thanks so much for the advice. I am going to go ahead and pay it off here in the next two months and then start snowballing my student loans again. When I saw my first payment and $149 of it went to interest it made my skin crawl. I can't wait to pay it off!