Your FICO scores will rise a little (maybe none at all) by paying the auto loan off quickly. You stand to gain more by paying on time for the whole term of the loan.
FICO_Focused wrote:Does anyone know the benefits of rapidly paying down installment accounts? We all pay our CCs more than the minimum, keep utilization low and reap the benefits there, and they are significant.But what is the preferred / optimal scenario for Installment loans Auto loans specifically?I have ~$30k owed on a 60 month plan w/ 57 months remaining... Is there any FICO benefit from paying down the beginning balance at an expedited rate? Or is it just the timely payments that are taken into consideration here?Take Care.
I completely recommend paying it off early if you can because:
1. Less interest to pay!
2. Looks better to lenders for income reasons.
3. You still get points for the loan being paid.
4. The debt is counting against you on your score.
If you choose to not pay off early.
1. More history.
2. Lenders see you as more profitable.
IMO pay off as fast as you can unless you have 0% int.
There are other ways of making history that will cost you less $$.