topic Re: Auto FICO score question in Understanding FICO® Scoring

Auto FICO score question

IllinoisNative — Wed, 15 Jul 2015 17:00:01 GMT

I have one more payment due on my auto loan (YAY!) which I'll pay off in August. Does paying off an auto loan affect my auto FICO score? My FICO has my auto enhanced FICO scores at over 700. Will that drop with a paid off loan? Or does that number stay high since I have a good history with my auto loan? Currently, it's my only installment loan on my report so I'm expecting to take a hit for my credit mix. Thanks.

Re: Auto FICO score question

tufa4311 — Wed, 15 Jul 2015 17:21:26 GMT

@IllinoisNative wrote:
I have one more payment due on my auto loan (YAY!) which I'll pay off in August. Does paying off an auto loan affect my auto FICO score? My FICO has my auto enhanced FICO scores at over 700. Will that drop with a paid off loan? Or does that number stay high since I have a good history with my auto loan? Currently, it's my only installment loan on my report so I'm expecting to take a hit for my credit mix. Thanks.

It is well known that there is a possibiltiy, is some instances a high one, that once an installment loan is fully paid off it can negatively affect your score, esp. if you have no other installment loans. As an example:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Paying-off-my-car-loan-ruined-my-credit-Score-dropped-70-points/td-p/2235271

If you do a google search of myFICO.com you will see many instances of this.

Re: Auto FICO score question

IllinoisNative — Wed, 15 Jul 2015 17:25:35 GMT

Thanks! I was expecting to take a hit for my credit mix due to my only installment loan being paid in full. I just wasn't sure if that translated into my auto enhanced score taking the same hit. I was hoping not. lol

Re: Auto FICO score question

tufa4311 — Wed, 15 Jul 2015 17:37:54 GMT

@IllinoisNative wrote:
Thanks! I was expecting to take a hit for my credit mix due to my only installment loan being paid in full. I just wasn't sure if that translated into my auto enhanced score taking the same hit. I was hoping not. lol

Well, I would assume that the auto enhanced score would be hit hardest since it was an auto loan that was closed - I don't know for sure but sounds logical.

Re: Auto FICO score question

MarineVietVet — Wed, 15 Jul 2015 18:15:35 GMT

@IllinoisNative wrote:
Thanks! I was expecting to take a hit for my credit mix due to my only installment loan being paid in full. I just wasn't sure if that translated into my auto enhanced score taking the same hit. I was hoping not. lol

Perhaps one or both scores will take a (temporary) ding but you'll have one less debt and to me that's much more important.

Re: Auto FICO score question

IllinoisNative — Wed, 15 Jul 2015 19:47:59 GMT

I'm excited about having one less debt. I'm putting that money straight into a savings account every month. That's much more important. I'm thinking of taking out a small loan that I don't need just to have a loan reporting.

Re: Auto FICO score question

MarineVietVet — Thu, 16 Jul 2015 02:20:10 GMT

@IllinoisNative wrote:
I'm excited about having one less debt. I'm putting that money straight into a savings account every month. That's much more important. I'm thinking of taking out a small loan that I don't need just to have a loan reporting.

That's certainly your decision but you need to decide if paying interest on a loan you don't really need is worth a few points.