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Paying off an auto loan early and FiCO scores.....

Frequent Contributor

Paying off an auto loan early and FiCO scores.....

Question about paying off an auto loan early.  My student loans will be coming off deferment soon and in an effort to get as much debt paid down, I'm paying my auto loan off 2 years early along with all but one of my credit cards (leaving small balance to report).  Will my fico score go down since I am paying off an installment loan?  I am thinking not really, since I have a pretty significant amount in student loans...but I wanted to double check with the forums.  If it does, I'm ok with it, because my intent us to get rid of as much debt so I can focus paying my student loans.  

 

Thanks all!!!

Scores 8/25/2017~ TU: 753 / EXP: 742 / EQ: 726
Goal: 770's or higher by end of 2017
Message 1 of 19
18 REPLIES
Established Contributor

Re: Paying off an auto loan early and FiCO scores.....

It may drop a little bit yes.
Message 2 of 19
Valued Contributor

Re: Paying off an auto loan early and FiCO scores.....


irunfromcredit wrote:

Question about paying off an auto loan early.  My student loans will be coming off deferment soon and in an effort to get as much debt paid down, I'm paying my auto loan off 2 years early along with all but one of my credit cards (leaving small balance to report).  Will my fico score go down since I am paying off an installment loan?  I am thinking not really, since I have a pretty significant amount in student loans...but I wanted to double check with the forums.  If it does, I'm ok with it, because my intent us to get rid of as much debt so I can focus paying my student loans.  

 

Thanks all!!!


I don't know what will happen in your case, but I have a favor to ask:  Will you come back and report here what the effect actually was?  

 

Supposedly if you have other installment loans, like student loans, you should be covered for that category of credit mix and theoretically should not suffer a point loss.  However, it seems that almost always when people have an auto loan pay off, they come back and report a 20 point FICO loss.

 

I would be very curious to hear what your real life experience is with this.

FICO 08: EX-690, EQ-707, TU-697 - [9/19/2017]
FICO 04: EX-684, EQ-681, TU-724 - [9/5/2016]
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Message 3 of 19
Frequent Contributor

Re: Paying off an auto loan early and FiCO scores.....


CH-7-Rebuilding wrote:

irunfromcredit wrote:

Question about paying off an auto loan early.  My student loans will be coming off deferment soon and in an effort to get as much debt paid down, I'm paying my auto loan off 2 years early along with all but one of my credit cards (leaving small balance to report).  Will my fico score go down since I am paying off an installment loan?  I am thinking not really, since I have a pretty significant amount in student loans...but I wanted to double check with the forums.  If it does, I'm ok with it, because my intent us to get rid of as much debt so I can focus paying my student loans.  

 

Thanks all!!!


I don't know what will happen in your case, but I have a favor to ask:  Will you come back and report here what the effect actually was?  

 

Supposedly if you have other installment loans, like student loans, you should be covered for that category of credit mix and theoretically should not suffer a point loss.  However, it seems that almost always when people have an auto loan pay off, they come back and report a 20 point FICO loss.

 

I would be very curious to hear what your real life experience is with this.


Hi!  Yes I will definitely update what happens with my score.  As of Friday, I paid off my car loan about 2 years early. I already had been paying 2.5 years on it, so I don't know if that will have a positive impact.  I also paid off all but one CC reporting a small balance.  So we'll see what happens. Smiley Happy

Scores 8/25/2017~ TU: 753 / EXP: 742 / EQ: 726
Goal: 770's or higher by end of 2017
Message 4 of 19
New Member

Re: Paying off an auto loan early and FiCO scores.....

I paid off a Capital One auto loan last summer, a year and a half into a three-year term. No change in credit scores.

Message 5 of 19
Frequent Contributor

Re: Paying off an auto loan early and FiCO scores.....


CH-7-Rebuilding wrote:

irunfromcredit wrote:

Question about paying off an auto loan early.  My student loans will be coming off deferment soon and in an effort to get as much debt paid down, I'm paying my auto loan off 2 years early along with all but one of my credit cards (leaving small balance to report).  Will my fico score go down since I am paying off an installment loan?  I am thinking not really, since I have a pretty significant amount in student loans...but I wanted to double check with the forums.  If it does, I'm ok with it, because my intent us to get rid of as much debt so I can focus paying my student loans.  

 

Thanks all!!!


I don't know what will happen in your case, but I have a favor to ask:  Will you come back and report here what the effect actually was?  

 

Supposedly if you have other installment loans, like student loans, you should be covered for that category of credit mix and theoretically should not suffer a point loss.  However, it seems that almost always when people have an auto loan pay off, they come back and report a 20 point FICO loss.

 

I would be very curious to hear what your real life experience is with this.


Update:  I just got an alert on my equifax with paid off loan and my score dropped 20 points. Ouch!  Good thing I'm not looking to apply for anything in the foreseeable future. I do wonder if my score will rebound?  I have several student loans which is why I paid off my car early.  They come off deferment soon. And I am reporting small balances on one or two CC's.  So hopefully my score will rebound. Will let you know what happens with my other two reports. Smiley Happy

Scores 8/25/2017~ TU: 753 / EXP: 742 / EQ: 726
Goal: 770's or higher by end of 2017
Message 6 of 19
Valued Contributor

Re: Paying off an auto loan early and FiCO scores.....


irunfromcredit wrote:

CH-7-Rebuilding wrote:

irunfromcredit wrote:

Question about paying off an auto loan early.  My student loans will be coming off deferment soon and in an effort to get as much debt paid down, I'm paying my auto loan off 2 years early along with all but one of my credit cards (leaving small balance to report).  Will my fico score go down since I am paying off an installment loan?  I am thinking not really, since I have a pretty significant amount in student loans...but I wanted to double check with the forums.  If it does, I'm ok with it, because my intent us to get rid of as much debt so I can focus paying my student loans.  

 

Thanks all!!!


I don't know what will happen in your case, but I have a favor to ask:  Will you come back and report here what the effect actually was?  

 

Supposedly if you have other installment loans, like student loans, you should be covered for that category of credit mix and theoretically should not suffer a point loss.  However, it seems that almost always when people have an auto loan pay off, they come back and report a 20 point FICO loss.

 

I would be very curious to hear what your real life experience is with this.


Update:  I just got an alert on my equifax with paid off loan and my score dropped 20 points. Ouch!  Good thing I'm not looking to apply for anything in the foreseeable future. I do wonder if my score will rebound?  I have several student loans which is why I paid off my car early.  They come off deferment soon. And I am reporting small balances on one or two CC's.  So hopefully my score will rebound. Will let you know what happens with my other two reports. Smiley Happy


This happened to me this past January, 29 point drop for paying off a 72 month auto loan in 33 months (I still had another auto installment loan and a Mortgage). Good news is that by the end of February my scores recovered 27 points and when I added a new auto loan later in the month my scores didn't go up or down at all. 

Message 7 of 19
Regular Contributor

Re: Paying off an auto loan early and FiCO scores.....

I'll take the savings over the 20 point drop any day. The cash in my bank account rules everything around me... Not a FICO score.

Tell me what someone with a 720 enjoys that someone with a 700 score won't?
I've been where you are trying to go and I don't wanna go back.
Message 8 of 19
Frequent Contributor

Re: Paying off an auto loan early and FiCO scores.....

That's a huge drop! I paid my car loan off early and had a 5 point drop.  I added a new car loan earlier this month with no change.  

Message 9 of 19
Frequent Contributor

Re: Paying off an auto loan early and FiCO scores.....

Another update:  My experian score dropped 16 points. Yowza!   Kind of shocking to see, but again my whole reason for paying off early is to reduce my debt and start paying off my student loans. Despite the major drop I went from mid 700's to lower 700's... So I shouldn't wig out. 😋

Scores 8/25/2017~ TU: 753 / EXP: 742 / EQ: 726
Goal: 770's or higher by end of 2017
Message 10 of 19