Closed Auto Loan Reporting As Open Question

[smsoller22]

I have an auto loan reporting across all bureaus as open but in good standing. I suppose that is well and good except for the fact that the loan was closed in Dec of last year. My question...would having the loan shown as open reduce my credit score or do you think it's helping? I've heard having a loan of that nature close can reduce your score so I'm not sure what to do about it.

Any input is appreciated.

Thanks!

[Anonymous]

Do you have any other open installment loans?  (Ones that really are open and are reporting as such, on which you still owe money, and on which there are no derogatory data?) 

If you have other open installment loans, then it's not likely you are getting substantial benefit from the closed loan reporting as open.  But if you have no other open loans, there may well be some advantage.

By the way, can you tell us how the balance reads for the loan that is (erroneously) reporting as open?  Does it correctly state a $0 balance?

[smsoller22]

I do not have an other open revolving accounts of that nature outside of credit cards.

The last activity for Equifax & Tranunion shows August of 2014 while Experian shows unavailable and it does show a balance of $613 across the board. The vehicle was paid off and I received the title for it so I have no clue why it shows a balance.

[Anonymous]

Well, see whether you get any other feedback from other folks on here.  But if I were you, I'd just end up having some low grade anxiety if I had a record on my report that claimed I owed a big chunk of money for something I didn't.  The explanation, I assume, is that the creditor never updated the record to show that you paid off the loan.

Unless someone here tells you differently, I'd reach out to the lender and confirm with them that they agree that you paid off the loan in December.  If they do agree, explain that they haven't yet updated the final status of the account to show that you paid it off -- and ask them to do that.  That way you'll end up with an accurate report that shows future creditors that you can manage and pay off a car loan.

I have allowed incorrect data to stay on my report when it is absolutely 100% positive.  This is a bit of a mixed bag: a record that falsely asserts you still owe a creditor a good chunk of change.  Whetever benefit you get out of it being "open" doesn't seem worth it to me.  But see what other people say.

[RobertEG]

I have seen mixed and conflcting statements as to whether a closed installment account continues to help mix of credit.

I have never seen a definitive statement from Fair Isaac on their scoring of closed installments in mix of credit.

It may make a difference in auto enhanced scoring as to whether a auto loan is past or sitll open.  Again, no clear statement that I am aware of from brother Isaac.

Does the account show a $0 remaining balance?  If so, then scoring aside, one reading your report would assume it is paid and closed if it has no reported derogs, so you could most likely let it ride.  However, I would be more concerned if they also did not update the debt balance to show $0.

[takeshi74]

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@smsoller22 wrote:

I do not have an other open revolving accounts of that nature outside of credit cards.

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FYI auto loans are installments, not revolving.  Credit cards are, however, revolving.

I'd suggest ensuring that the account is reporting properly versus trying to eke out points based on how it is reporting.  If it's your only open installment it could be helping your mix of credit but there could be unintended consequences should you seek out new credit in future regardless of the scoring impact.  If your score hinges on the benefit to mix of credit then you have other issues you need to address anyway with a bigger impact.