Installment loan reporting

[7PM789]

If someone were to take out a 60 month auto loan, make double payments and pay it off in 30 months' would it report as "paid as agreed" for 60 months' or just the 30 it took to pay it off?

[user5387]

I am looking at a TU report for a closed installment loan, that was paid off early, and it has:

   Account Status: Closed

   Payment Status: Paid or paying as agreed

I would not assume that such a loan will remain open, or that a monthly "OK" box will continue to show up.

[7PM789]

That's what I thought but it never hurts to ask.

How much of a negative impact would your fico take if you left a minuscule balance ride on a %0 loan just to milk the reporting?

Or would it be more beneficial to have a loan showing as paid off early in the case of a manual review?

[user5387]

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@7PM789 wrote:
That's what I thought but it never hurts to ask.

How much of a negative impact would your fico take if you left a minuscule balance ride on a %0 loan just to milk the reporting?

Or would it be more beneficial to have a loan showing as paid off early in the case of a manual review?

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A rule of thumb is that an open installment loan benefits your scores a bit.

There are some inherent downsides, for example interest issues, DTI issues, and the effort required to maintain the loan in good standing.

So you have to weigh the pros and cons and make a choice.

[Revelate]

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@7PM789 wrote:
That's what I thought but it never hurts to ask.

How much of a negative impact would your fico take if you left a minuscule balance ride on a %0 loan just to milk the reporting?

Or would it be more beneficial to have a loan showing as paid off early in the case of a manual review?

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Underwriting is the one place we have to presuppose competence when it comes to reviewing a credit report.  I simply make the assumption they're as sophisticated as I am when it comes to analyzing a report... and I can spot FICO reindeer games easily on a credit report, likely because I play them.

To be brutally honest, I milk my tradelines whenever possible: on an installment loan, I absolutely do this when I can if the resultant interest is trivial to me.  I don't mind having the conversation if it comes up with an underwriter, but other than my applications for a couple trivial secured loans, it's never come up.