Posts: 7
Registered: ‎10-22-2007

Pay off car loan before obtaining mortgage?

Hi, all.


I have a auto loan that will be paid off in February of next year.  I'd also like to purchase a house a bit later this year.  I'm wondering if my CR would look better to a loan officer with an active car loan or a car loan that's paid off.  Will my credit score change when the loan is paid off?




Moderator Emeritus
Posts: 32,869
Registered: ‎08-04-2007

Re: Pay off car loan before obtaining mortgage?

What else do you have that's opened?


Lenders generally will remove your car pmt from DTI inside a few months prior to paying it off, so that'll help. Per FICO, it's YMMV.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.