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Impact of auto loan payoff on credit score

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Anonymous
Not applicable

Impact of auto loan payoff on credit score

I was hesitant to pay off my car loan in advance, as I'd planned, because I'd read of drops of up to 70 points -- and any forecasting I tried showed a drop of at least 20-25 points.  We'll I paid it off and held my breath for my new credit score and the drop was only FIVE POINTS.  Though I did have two auto loans, so still have one open as part of my credit mix.  Also, since my score was 825 the change may have less impact than someone with a lower score.  Hope the info is helpful to anyone with similar concerns.

Message 1 of 6
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Revelate
Moderator Emeritus

Re: Impact of auto loan payoff on credit score


@Anonymous wrote:

I was hesitant to pay off my car loan in advance, as I'd planned, because I'd read of drops of up to 70 points -- and any forecasting I tried showed a drop of at least 20-25 points.  We'll I paid it off and held my breath for my new credit score and the drop was only FIVE POINTS.  Though I did have two auto loans, so still have one open as part of my credit mix.  Also, since my score was 825 the change may have less impact than someone with a lower score.  Hope the info is helpful to anyone with similar concerns.


Which score are you monitoring?

 

That's potentially an excellent data point if it came from SW or similar, thank you for sharing; in this case if you have an open installment tradeline and plenty of installment history, should still have the bulk of the points.  In your case I would've theorized a handful of points lost, and that would've been an excellent guess looking at the results.

 

TBH, there's some descrepancy on how much tradelines just need to be on the report, vs. how much they need to be listed as open on the report... FICO 8 appears to much prefer open accounts than the older models.  We just don't have enough anecdotal data yet as installment tradelines aren't as common and aren't open as often statistically as credit cards, hopefully we get enough good datapoints like this one where we can start pulling something together, though in my case I just opened two silly secured installment loans for 5 years and called it good.




        
Message 2 of 6
Anonymous
Not applicable

Re: Impact of auto loan payoff on credit score

It was in fact the score watch I was monitoring here at MyFico (Equifax.)

Message 3 of 6
Revelate
Moderator Emeritus

Re: Impact of auto loan payoff on credit score


@Anonymous wrote:

It was in fact the score watch I was monitoring here at MyFico (Equifax.)


Nice!  Thank you for sharing the datapoint Bruno!




        
Message 4 of 6
fused
Moderator Emeritus

Re: Impact of auto loan payoff on credit score

I paid off an auto lease recently and when it reports on my CR's I'll report in this forum any changes to my FICO 08 scores. I don't have any other open installment accounts on my reports.

Message 5 of 6
Revelate
Moderator Emeritus

Re: Impact of auto loan payoff on credit score


@fused wrote:

I paid off an auto lease recently and when it reports on my CR's I'll report in this forum any changes to my FICO 08 scores. I don't have any other open installment accounts on my reports.


Doomed senor! Smiley Happy

 

Definitely looking forward to your datapoint as well, more and more people are reporting drops when their last open installment loan closes, but not always convinced it's in isolation.




        
Message 6 of 6
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