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Hi,
I have an auto loan balance of $10,000 and I want to pay it off and hoping that my FICO score will get higher.
How many points will it increases and how long will it taked to see the increase? My current TU=807 and EQ=787 as of 07/29/2009.
Thanks!
Wathchman,
Thanks for the ideas! I think I will put the money in my pocket. Besides the interest on the car loan is only 2.9% and it will be paying off in July of 2010, which only a year from now.
@Anonymous wrote:Wathchman,
Thanks for the ideas! I think I will put the money in my pocket. Besides the interest on the car loan is only 2.9% and it will be paying off in July of 2010, which only a year from now.
Do you make 2.9% on your savings rate?
If you have adequate cash reserves, AND are receiving less than a 2.9% return on your money, then I would pay the car off because you will "make money" from the difference in the interest on loan vs. interest on savings.
If you don't have adequate cash reserves (6 months living/expenses), then don't pay the car off, because you need to have that cash cushion.