Paying several payments immediately after financing.

[Slab]

I recently bought a new car and a new motorhome with nothing down through USAA. I traded a pickup which was financed in on the motorhome. I didn't trade anything when getting the new car.  Since I had money on hand, I paid 6 payments on each loan immediately after the loans closed and before the new loans were reported on my credit. My AAoA didn't change from 3 years because I figured it up and made sure the AAoA would not go down year wise. My scores did not go down because of the 2 new loans. Did this happen because I paid the 6 Payments ahead before being reported or was it because the AAoA remained the same? My file has gotten pretty thich so that is why  the AAoA did not go down below the 3 year mark. Am I correct that the CRAs do not consider months and base the AAoA on each added year? Thanks a lot for any advice.

[Revelate]

Because AAOA didn't change.

How often you make the payments doesn't matter on a tradeline, they'll only have reported the one OK with the aggregate payment information every month regardless of how much you pay in it.  

Out of curiosity with USAA since you did this, do they push the due date for your next payment out into the future, call it December if you've made six payments?  Or do they apply it directly to principal or some hybrid vis a vis DCU?

You are correct re: AAOA as far as we know, it's rounded down to the nearest year, tested to exhaustion previously.

[Slab]

USAA pushes the payments out to the future which now has me with a Jan 2015 due date. Interest figures out to be the same so I never have paid principle only. Of course, I pay every month so as to pay the note off quicker. I have not ran into any company that doesn't allow me to pay this way. USAA does have on the payment page the opportunity to pay additional principle which I ignore and pay whatever I want to pay above the payment amout. I have never missed a payment just because I am ahead and don't intend to but should there be some reason on down the line and I wouldn't be able to make a payment, it is good to know that I am taken care of. 

The motorhome was financed for 15 years and after having paid 8 payments in a 2 month period (I had the extra cash available because I didn'thave to make a down  payment) I was able to refinance though USAA again at a lower interest rate. At about the time this was going on,AMEX had backdated a card which kept my AAoA from going down which in turn kept my credit score from going down and in fact, went up.

Thanks a lot for the reply. 

[Revelate]

DCU unfortunately will only allow me to push the payment date out 3 months in the future and they send me a nasty gram and forcibly reset the clock if I do it inside their system.  Not certain if I had known what I do now, given how quickly I paid off that loan, if I wouldn't have been better off going with USAA or another lender and just let that tradeline idle for it's lifetime after paying 95% of it (or whatever off) and pushing the date out by years.  Wouldn't fool underwriting, would be good for FICO with minimum interest paid.

[Slab]

Are you a member with USAA? I have been a member for about 5 years, have 2 credit cards with them and they have financed 2 RVs and 3cars during this period without having to pay anything down. When I financed my first car with them, my scores were about where yours are and they didn't require anything down so once you are in with them, they treat you well. I recently opened a checking and savings account with them and I already had insurance with them. I realize that paying ahead on my installments that it might not help my FICO but it helps with their internal scoring. The motorhome that i financed with them at 5.75%, I was able to refinance at 4.25% with them after paying 8 months ahead and my score going up into the excellent bracket on Equifax (759 or above). I thought that was pretty good of them to save me over 12k ininterest over 15 years if I paid just the minimum payments forward. My goal going forward is to double up on my payments for a few more months and then sell the new motorhome and buy something upgraded. Since I am not upside down on the loan, they told me that I can refinance again when I get ready. I won't buy a new one or refinance again untill I am able to do it without my AAoA  staying above 3 years. One way of doing this quicker is to get another AMEX card which will be backdated to 1999 which will help my AAoA again. 

It seems to me that having an AAoA at 3 years as opposed to 2 years, makes a lot of difference. Of course an AAoA of 4 years or more would be better but I like switching vehicles often so unless I find a vehicle that i really like my AAoA will probably not get above 3 years. 

You seem interested in USAA  so, ifyour would like any more information about them, maybe I canhelp you. 

[takeshi74]

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@Revelate wrote:

Out of curiosity with USAA since you did this, do they push the due date for your next payment out into the future, call it December if you've made six payments?  Or do they apply it directly to principal or some hybrid vis a vis DCU?

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IIRC they provide an option and I've always chosen principal only when making additional payments.

[Revelate]

Technically been a member of USAA for 24 years now, though was on hiatus for a while.

I'm curious as eventually I'm going to have to finance another car, and understanding how a lender structures their loans is non-trivial as I typically pay off my cars way early, so making it work for me from a FICO perspective as well is completely useful by getting on the order of a 4 year auto tradeline for minimal interest paid compared to the typical 5 year loan.

[Slab]

USAA has a car buying service that you can go through which can save you some money on the purchase price. You can call USAA and they can explain the process or you can go through their website. You can get pre-qualified by telling them how much you will need and if approved, you will be able to print off a form that you can take to the dealer of your choice and use it just like a certified check. USAA will tell You what interest rate that you qualify for. When you go into the dealership, you can tell them the parameters of your loan approval through USAA and at this time of year the dealer (such as Honda and many more) might have a lower interest rate which you could take advantage of. Should the dealers rate be lower than USAA, USAA might match the lower rate. In my case, one time, Honda's rate couldn't be matched by USAA so I took the Honda rate and no harm no foul with USAA. I went ahead and insured through USAA. Both offered the same repayment options. Even though I signed up for direct payment through my checking account, I have paid ahead and they will not take out of my checking account if I am paid ahead. It seems that most dealers are aware of USAA's process. 

I hope this helps and if you have any more questions, just ask.