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rifleman wrote:
I am worried about how paying off 2 loans will effect my Fico Score.
I know paying off these loans may negatively effect my score in a few ways:
#1: It will shorten my credit history. I have seen arguments on weather or not
open/closed accounts are weighed equally, and I have come to the conclusion, that open accounts are weighted more then closed accounts in the Fico formula.
#2: I will have no more Open Installment accounts on my report. Every Installment account will be paid--so my only open accounts will be Three Revolving accounts (credit cards).
How much of a score drop do you think I will take if I pay these off? I will be essentially killing off all installment Debt, so Won't this cause me to loose points because I don't have a "Mix of Credit"?
Please help! I suppose I could keep paying these loans but slowly over time, but quite honestly I am sick of paying interest, and I hate the principle of having to pay interest in order to get my fico score higher. I do not have to do that with Credit cards...I can wrack up a balance, get the balance to report, and then pay off the card in full without accruing any interest charges.
@Anonymous wrote:
I am worried about how paying off 2 loans will effect my Fico Score.
I know paying off these loans may negatively effect my score in a few ways:
#1: It will shorten my credit history. I have seen arguments on weather or not
open/closed accounts are weighed equally, and I have come to the conclusion, that open accounts are weighted more then closed accounts in the Fico formula.
#2: I will have no more Open Installment accounts on my report. Every Installment account will be paid--so my only open accounts will be Three Revolving accounts (credit cards).
How much of a score drop do you think I will take if I pay these off? I will be essentially killing off all installment Debt, so Won't this cause me to loose points because I don't have a "Mix of Credit"?
Please help! I suppose I could keep paying these loans but slowly over time, but quite honestly I am sick of paying interest, and I hate the principle of having to pay interest in order to get my fico score higher. I do not have to do that with Credit cards...I can wrack up a balance, get the balance to report, and then pay off the card in full without accruing any interest charges.