07-03-2012 10:10 AM
07-03-2012 11:13 AM
Closed accounts still count for your score as much as open accounts.
Your score should improve a little since your installment utilization would be down.
In any case do what makes the most financial sense. Paying off a loan early, assuming there is no catch like a prepayment penalty or anything like that, will save you money in interest so that should be what you go for regardless of effect on a score.
07-03-2012 01:13 PM
Closed accounts still count for your score as much as open accounts. Closed accounts still count as part of your credit mix but open, active accounts are weighed more heavily.
Your score should improve a little since your installment utilization would be down. Installment loan utilization is looked at a part of your score but is such as small part it can virtually be ignored. I wouldn't expect any score difference when this is paid off. As always YMMV (Your Mileage May Vary).
In any case do what makes the most financial sense. Paying off a loan early, assuming there is no catch like a prepayment penalty or anything like that, will save you money in interest so that should be what you go for regardless of effect on a score. I agree that paying off debt is always a good thing and should be the #1 priority with consideration of a score a very distant #2.
07-03-2012 03:58 PM
+1 to above; pay it off just to have less debt.
If you're paying off over the next two years, then you should expect the only score increase to be the result of a longer AAoA, and not because of the installment util and/or installment being closed v.s open. I paid off a $3500 note in one month and got zero FICO movement.
07-04-2012 02:39 AM
My score stayed exactly the same, as did my spouse's. But, like PPs say, it saved us money to pay them off early, so we did.
07-30-2012 10:40 AM
I recently paid my car loan off early and my myFICO DROPPED 75 Points.... still can't figure out why... it was only myFICO and only the Equifax version... everyone else went up a few points....for whatever it is worth
07-30-2012 11:46 AM
My score dropped 1pt when I paid off a car loan that was about 12 months old
07-30-2012 08:44 PM - edited 07-30-2012 08:46 PM
Finish paying off an installment loan won't increase your score; it's paying it and having less debt overtime that will raise your score.
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