02-20-2013 03:46 AM
I'm new to the forum and I need some advice. Let me know if this is not the correct forum for my question. I recently paid off my auto loan with Santander ($793). My current instalment accounts are at 17% utilization and my revolving accounts are at 19%. Total utilization is 19%. since I've paid the loan off will this lower my score? I have one installment loan remaining, everything else is revolving. I assume this will change my AAoA which will lowes my score? My current score is 632. I can't afford a decrease in my score. Any help/advice is greatly appreciated!
02-20-2013 04:50 AM
I am sure someone will come along to correct me if I am wrong, but as I understand it, paying your loan off will not ding you too badly (if at all), because you have another installment loan on your account. Also, it won't decrease your AAoA because it will continue to report for 10 years. (ie: If you paid on the loan for 5 years, it will report as a 5 year old account for the next 10 years, and figure into your AAoA like that)
Hopefully someone else will come along to back this up (or refute it and teach both you and I something).
02-20-2013 09:18 AM - edited 02-20-2013 09:20 AM
The information above is substantially correct. The payoff will have little or no effect on your score because you still have a solid mix. The account should remain on your credit reports for about 10 years after closure. (Some have spontaneously dropped sooner, some remain well after, but generally 10 years is the rule). It will continue to factor into AAoA but will not be frozen at 5 years. It will factor as one month older each month it remains for calculating purposes.
Edited to add: Congratulations on paying off the account. It will make your next car loan easier assuming there are no negative factors on this one.
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