Re: Need help understand
[ Edited ]
ing a closed auto loan while opening a new auto loan.
10-21-2012 06:18 PM - edited 10-21-2012 06:23 PM
I recently paid off my old auto loan through chase bank, and got approved for a new lease. My question is will my score go down since i paid off my previous loan even though i have a new loan through the lease. And if my score does go down, will it eventually have a huge increase since i have shown that i can handle huge loans?
Auto loans are installment loans. If all other things remain the same, you may or may not see any change in your Fico scores depending upon your current file. I would
guess that the effect would be minimal, and the most change will likely be a small drop on the CRA that was pulled due to the hard inquiry, and that also will be short lived. Best case is your auto enhanced scores will improve if you maintain the account in good standing. I paid and closed an auto loan and there was no change in my score. I then opened another installment loan, and lost five points due to the hard inquiry. That came back the next month, but YMMV. Installment loans just do not make big waves in your Fico as compared to revolving balances(credit cards). Keep in mind all of this depends on what is in your current file, your credit mix, AAoA etc...., but for the most part it will apply. And......welcome to the forums.
Starting Score: 500's
Current Score: 725 EQ(DCU), 739 TU(Barclay), 765 EX(CS)
Goal Score:760 X 3
Take the myFICO Fitness Challenge