@Anonymous wrote:
Hello,
My significant other and I financed a used vehicle for approximately $14,000. Our plan is to pay it off in 6 or 7 payments to raise our credit score. Does this look really good on your credit or does it make a difference? Thanks!
I dont think it will help with raising CR scores at all. It will help with a manual review of your credit for another auto loan.
The Fico scoring system looks for at least 3 CCs and 1 installment loan to satisfy the 'credit mix' part of the scoring, which is 10% of the score.
Do you have another installment loan right now? It might end up costing points if you lose the installment loan category.
The Fico scoring looks for steady payments made on time within the credit mix categories, and it likes a long history of good payments.
For the purpose of increasing your score, I would say this wont help much, if at all.
If the interest rate is high, or if you need to free up DTI for something else, like a mortgage, then it is a good idea.
hth
