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I pai off the balance on my car loan to free up the payment amount in order to snowball my other debt. Will losing the installment loan balance hurt my FICO scores? I have a mortgage. I saw somewhere that mix of credit needed one or the other. Could someone give me a better understanding of how this works?
@crunching_numbers wrote:I pai off the balance on my car loan to free up the payment amount in order to snowball my other debt. Will losing the installment loan balance hurt my FICO scores? I have a mortgage. I saw somewhere that mix of credit needed one or the other. Could someone give me a better understanding of how this works?
Both your mortgage and auto loan count as installment loans and contribute positively towards your mix of credit so you won't the mix by paying off your auto loan.
Also your installment loan balances don't factor significantly into FICO scoring, so paying it off shouldn't have a big impact on your score.