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Achieve2012
Posts: 63
Registered: ‎04-17-2007
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Super Contributor
marty56
Posts: 5,679
Registered: ‎10-06-2007
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Re: paying off a finance account, help or hurt?

What is your CC util/  If you have util > 10% you might have better results by paying  it down to say 9% and then paying off the CFL.  I dont know how many points, if any you are being dinged for the CFL but lowering your util could give you a 20 pt or more boost to your score.
 
I paying off a CFL loan wont lower your score unless it counts towrds your util.  Someone chime in here to verify please.
09/12/2013 FICO: EQ: 772 EX:813 TU:752
Valued Contributor
debtisgood
Posts: 1,126
Registered: ‎03-25-2008
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Re: paying off a finance account, help or hurt?

The consensus seems to be that CFL don't hurt you so much as not help you as much as a regular TL. I also believe what little damage it may do to credit mix doesn't go off your CR until the TL is off, thus 10 years after you pay it off. You may as well just pay it off as you initially intended and pay down higher interest accounts first.
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RobertEG
Posts: 17,456
Registered: ‎03-19-2007
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Re: paying off a finance account, help or hurt?

Paying off a TL does not drop it from your avg age of accounts until 10 years after it is closed, so you wont lose credit history, so no FICO concern there. 
A CFL is usually not secured, and is thus at a higher risk, and therefore not scored as high as a secured install loan, and presumably, from a non-FICO perspective, it is probably at a relatively high APR.  Financially, it is probably not good to keep unless it is at a very low APR.
Paying if off will reduce your install % util, a postive.  The only FICO hit you might take is if you have no other install loans, which might affect your credti mix, but that is minor.  If you have other install loans, such as auto or mortgate, I would ditch it a NY City minute.

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