Re: Advice Please!
01-26-2013 06:43 PM
If you pay the auto loan off quicker, this will not help your score as much because of the shorter payment history. Ideally, you want to pay your regular monthly payment over time to see a larger increase in scores, lenders like to see a long payment history with pays as agreed status.
While paying longer is preferable from a pure FICO perspective, FICO <<< personal finances in my opinion.
That said, if you make extra payments to an auto loan, it doesn't necessarily shorten the tradeline by that much. When I was with Wells Fargo Dealer Services with my subprime loan, extra payments made actually pushed my next due date out by a corresponding amount. Had I known I was going to stumble into a well paying second job, I would've kept that ugly 19.35% interest rate, made a bunch of extra payments to principle, and then let the tradeline idle for two years, making a $1 payment or whatever each month just to keep it from being flagged as inactive... probably could've gotten 3.5-4 years out of my 5 year original term with not much in the way of interest paid.
Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 670, Wally TU 700, EX 718 (11/29/13, EX 07/11/13)
Goal Score: 680 in all three (01/01/14)
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