How many payments left until they don't count it in the DTI?

[Tooliebell]

We took out a loan to buy a small boat in September when we didn't think we would be getting a mortgage this year.  Could have paid cash for it but thought the loan would help my score.  The loan was for $1500. , payments are $100.00 a month, and I have made double payments on it.  The balance is about $1200.00 right now.   

I have read that liabilities with 10 payments or less don't count in your DTI but I asked the LO today and he said it is 3 or 4.  We could pay off the boat no issue, but I like the good payment history being added to my credit report. 

Do you know is it 10 payments and they don't count it or should I just pay the dang thing off. 

[cdtotten]

Each underwriter may have different standards. There will be little if no difference between paying off the loan and paying it monthly. Paying your bills on time each month is expected and doesn't directly influence your FICO score. It is the paying down of debt and the on-timeness of the payments that are important. Your accounts also age each month, which helps your FICO score. If you pay off the account, it will continue to report after closed and will be included in your AAoA.

No reason to keep it open unless you have to.

[Anonymous]

Our UW "waived" a personal loan that has 9 payments (months) left for payoff from our DTI calculation.  And we were told that each UW will have their own "standards" for this.

[Elated]

Tooliebell, I've been told that it is 10 payments or less on any account from my LO; although some lending institutions say 12 payments or less.

I think it varies from institution to institution.

I hope this helps...Good luck!

[GoodCredBen]

My LO said 12 months or less as well, because when looking at a 30yr note, thats not that long ...

then again YMMV