Chase Auto Loan to be paid off soon..

[IcEWoLF]

So I bought my 2010 Legacy 2.5i Premium in March of 2010, I signed up for a 72 months term at a 4.9% int.

I am halfway there, and I only have $1000 to go, which will be paid off by September, I am concerned now, if I pay off the loan, willt his cause my credit score to drop? If so how much will it drop by?

Don't get me wrong, I am super happy that I am paying off the loan this quick, but I want to make sure I don't hurt my credit by doing so, I want to do it in a responsible fashion. I worked hard to get my credit score where I wanted to be, last thing I want to do is make a wrong move to mess it all up.

[azguy13]

---

@IcEWoLF wrote:

So I bought my 2010 Legacy 2.5i Premium in March of 2010, I signed up for a 72 months term at a 4.9% int.

I am halfway there, and I only have $1000 to go, which will be paid off by September, I am concerned now, if I pay off the loan, willt his cause my credit score to drop? If so how much will it drop by?

Don't get me wrong, I am super happy that I am paying off the loan this quick, but I want to make sure I don't hurt my credit by doing so, I want to do it in a responsible fashion. I worked hard to get my credit score where I wanted to be, last thing I want to do is make a wrong move to mess it all up.

---

If it is your only installment loan then there is a good possibility that your score will drop a little. I am in the same boat as you right now as I will be paying off a 60 month loan in a month that I got in the end of 2011. However, I also have one other financed behicle so I don;t think I will take a hit. 

***edited for my amazing spelling skills***

[jm00ser]

Any drop in score should be offset by your happiness in not having a car payment! I know a slight drop in CS can be annoying, but no debt is better than having to pay!

[HoldingOntoHope]

The installment loan "should" remain on your credit report for a period of 10 years after it is closed / paid. And FICO will still count it in the mix of credit scoring factor as long as it is in the reports, so you should see no negative effect on scoring. You need to remember that all scoring is a mix of what's in your report at that moment so when people say "Well my score went down when my loan closed" or "My score went up when my loan closed" the real change factor could have been many things such as balance changes, new accounts, age of accounts, or any of the other FICO factors. Unless you get a score a day before and a day after an event with no other changes it is difficult to isolate a reason.

Pay the loan off because it makes financial sense to reduce debt. Pay all your bills on time, and utilize credit and credit limits wisely  and your FICO scores will take care of themselves.