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Credit Score and Installment Loans

Member

Credit Score and Installment Loans

I recently paid off an auto loan with a balance of $2,200. How many points can I expect my credit score to increase? Thanks for the help in advance!
Message 1 of 9
8 REPLIES
Moderator Emeritus

Re: Credit Score and Installment Loans

Congrats on paying off the car!  Must feel good to own it!
 
There is no set number of points (that FICO will reveal, anyway) associated with a single event because your score is based on a complex formula.  It depends on everything else going on in your credit world at the time.  Your credit history just aged another month, so that helps.  But what's the state of your utilization, prompt payment record, public records, collections, # of accounts, average age of accounts, mother's maiden name, etc.??? It's a moving target, so the best we can guess is that ... yes, your score will improve, assuming everything else is going peachy also.
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Bartender, bring another round of FICOtinis please!

9.4.2011: TU 805. EQ 815.
Message 2 of 9
Moderator Emeritus

Re: Credit Score and Installment Loans

You should see an increase.. but the largest increases tend to come from paying down revolving credit.
Message 3 of 9
Senior Contributor

Re: Credit Score and Installment Loans

Different for every profile. Different for the same profile even 6 months later. Sometimes a little sometimes a lot. Yes, their are specific reasons why. But too many to guess with out seeing your profile.
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Message 4 of 9
Super Contributor

Re: Credit Score and Installment Loans



matt3313 wrote:
I recently paid off an auto loan with a balance of $2,200. How many points can I expect my credit score to increase? Thanks for the help in advance!


It depends on the phase of the moon when when you paid it off, the time of the month that the credit company hears about it and number of drinks the typist had had when he entered the data Smiley Very Happy
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Message 5 of 9
Frequent Contributor

Re: Credit Score and Installment Loans

".....and number of drinks the typist had had when he entered the data
 
I'm with ya' on that one, for sure!
Message 6 of 9
Moderator Emeritus

Re: Credit Score and Installment Loans



matt3313 wrote:
I recently paid off an auto loan with a balance of $2,200. How many points can I expect my credit score to increase? Thanks for the help in advance!


I did the same thing about a year ago and my scores went up only 3 or 4 points.  Wondering if paying it over the full term is better...the reason, longer payment history.  But who knows!
Message 7 of 9
Senior Contributor

Re: Credit Score and Installment Loans

Due to the Rule of 78's and they way car loans are amortized if you don't pay the car off early in the life of the loan you really don't save that much interest. Its a tough decision to make. Some people feel they can do better investing the money elsewhere and when you add in the history to your tradelines it might just be better to pay the loan as agreed for the life of the loan.
Message 8 of 9
Moderator Emeritus

Re: Credit Score and Installment Loans



smallfry wrote:
Due to the Rule of 78's and they way car loans are amortized if you don't pay the car off early in the life of the loan you really don't save that much interest. Its a tough decision to make. Some people feel they can do better investing the money elsewhere and when you add in the history to your tradelines it might just be better to pay the loan as agreed for the life of the loan.




This is exactly right- interest at the end of a loan is very small. Unless there was a specific reason to pay it off early probably did not save much $.

How long was the account open?
Message 9 of 9