Paid off Auto Loan

[Anonymous]

Ok, so I paid off one of my two $26000 car loans (well actually GEICO insurance did) and actuall ther will still be a small balance (waiting for GAP insurance to kick in) Anywho, can anyone give me an idea of the impact on my credit score? Will I see a significant increase or a decrease? This account will soon have a 30day late (as I refuse to pay the note on a car that will be paid off by someone else, especially since I already have another car note to pay) reporting at the same time as the balance decrease from $26145 - $6400.

I would like to know how the 30day late as well as the huge decrease...I'm hoping to gain some points from the pay off to offset the 30day late...

Also, does anyone know if I can GW that late a few months from now?

[Anonymous]

Paying down installment accounts has very little impact on your score.  If it is your only installment account, you can even expect a small drop when it is paid off in full.

The 30-day late is going to hurt MUCH more than the paydown will help.  You may want to swallow your pride and do whatever you can to avoid the 30-day and then work it out with the insurance company later.  By refusing to make the payment, you are not punishing anyone but yourself.

[Anonymous]

Thanks for your response Cheddar, I actully have another car loan as well as 2 student loans, all paid on time. I am aware that the 30day late will hurt my score, but I was hoping to reveice an increase in my scores since I was paying an account off...Guess not.  Not only am I aware that the 30 day late will affect my scores, but I cannot afford to pay 2 car notes...Believe me, I really did not want the 30 day late, but they were taking so lond to send the money to Capital 1...my car was totaled in January, jsut reflected payment today...I needed to buy a car in Feb cause I could only have the rental for 30 days...

Anyway, I really need FICO 08 to kick in - this will be my first late payment in 3 years now...

[Anonymous]

We paid off 2 auto loans in August, 2007 and we lost 35 points because we no longer had a favorable "credit mix" that FICO likes to see. I've yet to recover fully from it.

[Anonymous]

Thanks Sylvia, Thank Goodness I will still have this "favorable mix". Guess I need to get my credit cards paid off (they are all just about maxed out unfortunately), so my scores can recover from the hit it's about to take when Capital One Reports on March 29th....

[Anonymous]

Definitely Mshamika! Keep paying on the installments and do everything you can to reduce the balances on the revolving credit cards!

It's a dangerous credit world out there in today's age of uncertainty, with high balance credit cards. Daily we hear of people going to the Universal Default APR rate of 30% or more, and credit limit cuts, or outright closing of cc's because of to high of a balance.

[Anonymous]

Thanks Sylvia, I'm working on paying the balances down now...