I currently have an 11k auto loan started at 13k. Have only had it since January. When I first start the loan it was for 66 months but since then I have come to the realization that I have paying it every month lol. So I plan to pay it off within the next year and a half and as you can see I have already knocked 2k out fairly quickly. How is this going to look on my CR by me paying it off early and will it help my fico score? Most people told me the loan would help my score but I have not seen that mcuh of a jump or anyhting like that.
Try to keep it for 18 months at least. You can pay it down as much as you like. Just do not pay it off until you hit that 18 months. Creditors want to see your payment history. The only way to do that is pay it over time. If you do not have another installment loan. Expect your scores to drop a bit once paid off.
@Gmood1 wrote:Try to keep it for 18 months at least. You can pay it down as much as you like. Just do not pay it off until you hit that 18 months. Creditors want to see your payment history. The only way to do that is pay it over time. If you do not have another installment loan. Expect your scores to drop a bit once paid off.
Ok I will pay off in 24 months but why would my scores drop?
You can go to the forum section about Fico scoring to get a better understanding of how paying off a instalment loan affects your scores. There are ways to manipulate the system. This is where you take out a small loan($500) through a CU and repay it over 5 years.
I know it's ridiculous to punish us for not being in debt.
Unfortunately it is the lenders that came up with the scoring models to benefit themselves.. Not the consumers.
I know it's ridiculous to punish us for not being in debt.
Unfortunately it is the lenders that came up with the scoring models to benefit themselves.. Not the consumers.