Having an auto loan?

[Anonymous]

Does having an auto loan, having paid extra payments and paying on time help my score at all? I've heard it won't until I pay it off. Is this true? We have a yr and a half left on the loan, but it will be less than that since we've paid more.

[Revelate]

The loan helps both FICO scoring and manual underwriting.

You actually get very little for paying it off: however, it still fully counts in your payment history, and also is an installment loan which counts in the mix-of-credit types.  Just keep doing as you're doing, paying on time.  Extra payments don't do much for your score other than reduce your outstanding debt, though that's never a bad thing from a financial perspective.

[pizzadude]

Paying on time is one of those things thats helps you more over time, so keep making payments and your score will improve.

Missing a payment will bring you an immediate and severe FICO score ding.

[cdtotten]

Paying more than the monthly payment will have little (if any) affect on your score. Installment utilization is an extremely tiny piece of the FICO puzzle. Paying off the loan will not help you as well, especially if it is your only active installment loan. Paying on time is the normal thing that is expected... doing it keeps your score on an even keel.

[Chris123nTx]

I paid off my jeep last year early. Had the loan through cap1. Was totally happy with the terms and all, but it sure feels nice having a fully paid off vehicle. When i did pay it off, my credit score dropped by, i seem to recall, about 30 points.

It regained all of it though within a couple months and has moved higher since then. I know that installment loans can help, but being onthe hook month after month if you dont need to be can be way worse than a few points on a credit score. For me, being able to sleep at night is well worth it.

[Anonymous]

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@Revelate wrote:

The loan helps both FICO scoring and manual underwriting.

You actually get very little for paying it off: however, it still fully counts in your payment history, and also is an installment loan which counts in the mix-of-credit types.  Just keep doing as you're doing, paying on time.  Extra payments don't do much for your score other than reduce your outstanding debt, though that's never a bad thing from a financial perspective.

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+1