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Score change time frame?

krh
New Member

Score change time frame?

Hi,

 

My daughter has a loan with Honda Finance which I am paying off/buying the car from her, and she's buying a Hyundai. Will her score improve when the Honda is paid off so that she'll get a better interest rate from the Hyundai dealer, or won't it matter? She has qualified to buy the car with the Honda still on her credit, but I'm wondering if it's advantageous for her to wait till the Honda is paid off. I have no idea what her FICO is, but she was told by two different dealers that her 'score' was 690+ and 720. No idea who or what score they are using.

 

 

Thank you!

Message 1 of 3
2 REPLIES
Moderator Emeritus

Re: Score change time frame?


krh wrote:

Hi,

 

My daughter has a loan with Honda Finance which I am paying off/buying the car from her, and she's buying a Hyundai. Will her score improve when the Honda is paid off so that she'll get a better interest rate from the Hyundai dealer, or won't it matter? She has qualified to buy the car with the Honda still on her credit, but I'm wondering if it's advantageous for her to wait till the Honda is paid off. I have no idea what her FICO is, but she was told by two different dealers that her 'score' was 690+ and 720. No idea who or what score they are using.

 

 

Thank you!


Welcome!

 

It proably won't matter to her FICO when the note is paid off. Installment utilization is a tiny part of FICO scoring. Likewise, you won't get dinged heavily for 100% utilization when adding a new car or plagued for years after adding a 6-figure mortgage. It really is insignificant. Now there might be a chance for a small single-digit increase as another account reaches $0. Any gain depends on your daughter's credit. Also once the loan is paid off it might take a month or two before it gets updated, and waiting may or may not be an option.

 

If there was a 690ish and a 720, then one of two things happened. First, she could be looking at two different credit reporting agencies (e.g. EQ vs. TU, TU vs. EX, etc.). That can produce different scores often by a large margin. Or second if it is the same CRA, then a classic FICO could be compared to an auto-enhanced FICO and that can cause a difference.

 

 

Message 2 of 3
Frequent Contributor

Re: Score change time frame?

It probably won't show as paid off unless you pay then wait until it shows up sometime my car loan only updates every 90 days its annoying.
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Starting Score: 534
Current Score: 682 EQ SW 660 TU 636 EX 3/26/13
Goal Score: 720


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