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Will opening and closing a autoloan improve credit or ???

Valued Contributor

Will opening and closing a autoloan improve credit or ???

I have a pre approved auto loan offer from my CU (they won't pull my CR for this). Its more like 'Capital One Blank Check' thing, I was wondering if I take the check and then give the check back (no charges for it).

 

Will it show up as a fully paid autoloan on my credit report?

How will it impact my history in short term and long term?

Is auto loan used in AAoA calculations?

 

I was not sure, if I should post it in auto loan section or here. If I have posted it in wrong section, my sincere apologies in advance for all the inconvenience.

Citi Hilton Reserve 22.3K | Citi Thank You 8.2K | CSP 15.5K | Chase Freedom 10K | Chase BA 15K | Chase United 8.5K | Chase Marriott 5K | Discover IT 9K | Club Carlson 13K | Amex SPG 20K | BofA Cash Rewards 11K | BofA Cash Rewards 50K
Message 1 of 9
8 REPLIES
Established Contributor

Re: Will opening and closing a autoloan improve credit or ???

I believe you have to actually cash the check recieved in order for them to put it on your CR.


Starting Score:TransUnion: 698 (12 FEB 2010), Equifax: 674 (12 FEB 2010)
Current Score (Lender Pulled):TransUnion: 684 (12 SEP 2016), Equifax: 696 (12 SEP 2016), Experian: 679 (12 SEP 2016)
Goal Score:All scores All scores at least 700+ by December 2017!!

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Message 2 of 9
Regular Contributor

Re: Will opening and closing a autoloan improve credit or ???

i am wondering the same about this as i got a pre approval letter from citi financial for a loan   

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BBVA/Compass 2/12 $ 5000 ----- Chase Freedom 12/10 $3000 ---- Cabela's 1/12 $3000 -----US Bank FlexPerks Cash Rewards 6/11 $3000 ----Walmart Discover 10/11 $2814 ------ Discover More 11/11 $2500 ----- Amazon Store Card 2/11 $2100---- Amex Zync 4/11 ---- Citi Dividend Platinum Select 3/11 $1950 ---- BofA Cash Rewards 12/11 $1000
Message 3 of 9
Epic Contributor

Re: Will opening and closing a autoloan improve credit or ???


vish1 wrote:

I have a pre approved auto loan offer from my CU (they won't pull my CR for this). Its more like 'Capital One Blank Check' thing, I was wondering if I take the check and then give the check back (no charges for it).

 

Will it show up as a fully paid autoloan on my credit report?

How will it impact my history in short term and long term?

Is auto loan used in AAoA calculations?

 

I was not sure, if I should post it in auto loan section or here. If I have posted it in wrong section, my sincere apologies in advance for all the inconvenience.


 

Did you apply for the credit or they just offered it to you?

 

If they just offered it and you never endorsed the check, it should not show up on our CR if you return it.

 

Auto loans are not calculated in revolving utilization.

 

Message 4 of 9
Contributor

Re: Will opening and closing a autoloan improve credit or ???

I don't know if it improved my credit or not, but NFCU did this with me.

 

I was approved for an auto loan, and they called to tell me to pick up the check.

I came in and told them I didn't want it, and that month it reported as paid/zero balance with 12k high balance.

 

This actually lowered my AAoA, so I don't know if it really helps anything. It's a positive TL that I'll have for 10 years.

EX / EQ / TU FICO
Start: ? / 633 / 621 March 2011
Current: 751 / 760 / 750 (PSECU, SW, QM)
My Wallet: Fidelity Amex 5k, NFCU CashRewards 10k,
SD: Barclays Apple 1.2k, Amex Zync NPSL, HomeDepot 1.2k
Message 5 of 9
Moderator Emeritus

Re: Will opening and closing a autoloan improve credit or ???


brian2220 wrote:

i am wondering the same about this as i got a pre approval letter from citi financial for a loan   


on another note and fyi - Citifinancial reports as a Consumer Finance Account.

That's a baddie. 

Folks debate how much of a negative impact a CFA has - but if you have the option to not open a CFA, I think it's better not to.

Just puttin' syrup on something, don't make it pancakes.
Message 6 of 9
Super Contributor

Re: Will opening and closing a autoloan improve credit or ???

I did something similar back in year 2000, but not intentionally..  MBNA financed a Dell laptop for me.  I returned the laptop within 30 days, but MBNA had already posted the new tradeline to my credit reports.  Today, the tradeline is still appearing on my TU report.    I made a mistake and disupted the tradeline with EQ and EX back when I didn't know much about credit.  That was the dumbest move I ever made.   

Message 7 of 9
Valued Contributor

Re: Will opening and closing a autoloan improve credit or ???

So I have not read anything bad about the idea yet.

 

I read that if I take the check and return it. It may or may not show up as a paid loan on my CR. If it does, it helps me, if it doesn't no harms.

 

Its not a consumer finance company or anything, its DCU (it was at number 10 in the list of biggest credit unions in the country).

 

Yes, its pre approved, I called and confirmed that they do not need to pull my CR for this.

Citi Hilton Reserve 22.3K | Citi Thank You 8.2K | CSP 15.5K | Chase Freedom 10K | Chase BA 15K | Chase United 8.5K | Chase Marriott 5K | Discover IT 9K | Club Carlson 13K | Amex SPG 20K | BofA Cash Rewards 11K | BofA Cash Rewards 50K
Message 8 of 9
Highlighted
Super Contributor

Re: Will opening and closing a autoloan improve credit or ???

 


vish1 wrote:

So I have not read anything bad about the idea yet.

 

I read that if I take the check and return it. It may or may not show up as a paid loan on my CR. If it does, it helps me, if it doesn't no harms.

 

Its not a consumer finance company or anything, its DCU (it was at number 10 in the list of biggest credit unions in the country).

 

Yes, its pre approved, I called and confirmed that they do not need to pull my CR for this.


I have one more scenario.  Capital One sent me a pre-approval loan offer for up to $10,000 back in 2006.  I didn't need it.  But since I was trying to build my credit and add a mixture of credit, I took it.  I put the money in an online savings account and paid Capital One the minimum for 8 months.  The final 8th month, I paid them off.  Today, the account still shows as Paid.  That was a good move I made. It improved my credit greatly. 

 

Message 9 of 9