Reply
Regular Contributor
avv7c0
Posts: 175
Registered: ‎01-18-2011

Score implications for paying off small installment loan

Good morning. I have a small installment loan of about $900 that I have the ability to pay off. The interest rate is 12% and the monthly payment is $50.

I have a total installment loan balance of $52,000 across student loans, car loan, etc. Credit card util is $2,000 of $33,000 limit, and i only maintain this balance for score purposes.

Current score is 780, due to multiple inquiries surrounding our home construction and mortgage app.

Since I have the ability to pay off the $900 loan, should I? And if so, what are the likely score implications both positive and negative?
----------------------------------------------------------
Fico Scores:
EQ - 811 (Feb '14)
TU - 829 (Mar '14)
EX - 814 (Mar '12) - Lender Pull
Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Score implications for paying off small installment loan

I'd PIF ASAP. There wouldn't be any negative FICO ding with everything else being equal. You might see a small bump with an added $0 balance, but it depends on how many TLs report a balance already in relation to your total number of TLs.

Moderator
pizzadude
Posts: 8,775
Registered: ‎01-28-2010

Re: Score implications for paying off small installment loan

 

+1.   I'd pay it off.   IMO paying off debt is always a good thing.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+