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Well I exceeded my goal of 700, I hit 704 from 554 in January.
I did this by removing 27 items, 3 judgments, most were medical but they were all from 2008-2009 so when I disputed them they were inclined to remove. I still have 2items left, one will drop off at the end of this month, the other one will drop off at the end of December leaving me with no negative items..
My question is this... My credit history only goes back to 2008, with a car loan that will be paid off in February, (February will be my last payment) after that what happens to the account? Because if it closes I am in trouble. I only have credit cards going back to Dec 2011 and I am an authorized user on 1 card. I am trying to buy a house, finally.
Do I really need to close on the house before this account is paid off?What kind of a hit should I expect when I do not have much credit history?
Any, I mean any ideas/suggestions are welcome...
Thanks in advance.
Once the last payment is made it'll update to $0 and FICO will score it as closed (regardless of open or closed status). YMMV on the score impact. If you have zero loans including mortgages, other car loans, SLs, etc., then it's possible you can see a score change. YMMV based on your credit. I paid off my last loan and EQ increased by 7 and TU dropped by 5, and was measured by pulling the day before and the day after it reported, with no other reported changes. Once paid, the loan will still factor into AAoA, length of history, mix, etc.
@Lasardo wrote:Well I exceeded my goal of 700, I hit 704 from 554 in January.
I did this by removing 27 items, 3 judgments, most were medical but they were all from 2008-2009 so when I disputed them they were inclined to remove. I still have 2items left, one will drop off at the end of this month, the other one will drop off at the end of December leaving me with no negative items..
My question is this... My credit history only goes back to 2008, with a car loan that will be paid off in February, (February will be my last payment) after that what happens to the account? Because if it closes I am in trouble. I only have credit cards going back to Dec 2011 and I am an authorized user on 1 card. I am trying to buy a house, finally.
Do I really need to close on the house before this account is paid off?What kind of a hit should I expect when I do not have much credit history?
Any, I mean any ideas/suggestions are welcome...
Thanks in advance.
Do you need help with your DTI to get the house? If so, closing the account and not having the payment will help you on your house purchase. As Ilecs said, YMMV on how your score will respond. Could go up or down, but my guess is not much either way. Installment loans don't have any or very little effect on your Fico score if they are kept in good standing, except in the long run to increase your AAoA and credit mix. Closing it could possibly drop you a little. My advice is, if you need help with your DTI, then pay it off and close it. If not, then keep it open, especially if you are borderline on your Fico for qualifying purposes/interest rate.
Hi!
I see that you are looking at the possibility of a mortgage in the future... since that is the case, I highly recommend that you check out the MyFico Mortgage Loan forum.
Below is a short list of helpful mortgage loan related links that may help you prepare for the process:
Guide to Common Abbreviations - Barry
Mortgage Acronyms & Abbreviations (what does PITI mean?) - ShanetheMortgageMan
Good Faith Estimates Explained - ShanetheMortgageMan
The Mortgage Pre-Approval Process - ShanetheMortgageMan
Evaluating Conventional vs. FHA (VA & USDA) - ShanetheMortgageMan
Definately feel free to post any questions you have about DTI and Pre-Approval Odds over there! In addition, you may qualify for downpayment assistance as well as other programs to help you get into a new home!
Best of Luck to you!
2 things I see here.
1 - I paid off my auto loan and my score didn't move, I checked my Fico before and after. But I do have other installment loans. I have heard if you don't have an open installment loan it can cost you some points.
2 - When getting a mortgage they like to see open tradelines, I believe its 3 of them that have a year of history. Closing this auto may thin out your file.