You will lose a little in credit mix, with no other install loans, but the postive is that your % util of install loans will drop to zero, which should pick up about what you lose in credit mix. Credit mix is only 10%. Not highly significant. While total FICO %util is 30% of score, install util is around 5% of that 30%, so each will just about wash. And you are no longer paying interest on the install loan! A few FICO points up or down in FICO is not money in your pocket, and paying off a loan with no more interest due is a smile in the pocket!
You did right, unless you are planning to apply immediately for new revolv credit, and your immediate FICO score, plus or minus a few points each way, has any immediate meaning. Highly unlikely. Sit back, have a beer, and enjoy the loss of debt!!! Mortgage loans are not as highly pegged to FICO scores.
Congrats! You now know the game, just dont be concerned about the game each day. It is ONLY important when you actually need to apply for new credit. Other than that, FICO points are just ego, and not money.
And do not lose knowledge of the fact that, if you are about to apply for a mortgage loan, FICO is not the only factor evaluated by the mortgage officer. Showing that you are allmost debt free will have a lot more impact on your loan officer than a plus or minus five in your generic FICO score, which does not even take into accout income, total debt, family income, residency history, etc. They look, not just at FICO, but also at income/debt ratio, and you have nailed that bugger! You paid off, in full, an installment loan. that shows a lot more to a secured lendor.
I think you did exactly the right thing, based on where you are, and where you are going!
Message Edited by RobertEG on
02-22-2008 06:50 PMMessage Edited by RobertEG on
02-22-2008 06:57 PM