topic Re: Car loan paid off in General Credit Topics

Car loan paid off

Anonymous — Wed, 19 Aug 2009 04:13:16 GMT

Hi everyone! I will be done with my car loan next month, and it's being paid off on time. Now the only installment account I will have on my report as of next month will be my student loans, which are deferred. I was told that student loans don't have that much of an affect on your credit score so will I have to open another installment account in order to have a mixture in my credit report?

Re: Car loan paid off

Lel — Wed, 19 Aug 2009 04:30:04 GMT

Your paid-off car loan will continue to appear on your credit reports for 10 years, and will continue to have a positive effect on your credit score. Your student loans and car loan all add to your mix of credit.

If you don't have a need to accumulate new debt (that is, you don't need a new car, a new home, or a new education), then you shouldn't feel compelled to do so just for the sake of your credit score. You can't buy gas and groceries with FICO points.

Re: Car loan paid off

smallfry — Wed, 19 Aug 2009 11:00:46 GMT

@Lel wrote:
Your paid-off car loan will continue to appear on your credit reports for 10 years, and will continue to have a positive effect on your credit score. Your student loans and car loan all add to your mix of credit.

If you don't have a need to accumulate new debt (that is, you don't need a new car, a new home, or a new education), then you shouldn't feel compelled to do so just for the sake of your credit score. You can't buy gas and groceries with FICO points.

So a closed car loan still helps with your FICO mix of credit? RU sure?

Re: Car loan paid off

Anonymous — Wed, 19 Aug 2009 13:38:43 GMT

@Anonymous wrote:
Hi everyone! I will be done with my car loan next month, and it's being paid off on time. Now the only installment account I will have on my report as of next month will be my student loans, which are deferred. I was told that student loans don't have that much of an affect on your credit score so will I have to open another installment account in order to have a mixture in my credit report?

I can't wait until May. My car loan will be paid off too. I will only have my student loans. No more car payments!!

Re: Car loan paid off

Anonymous — Wed, 19 Aug 2009 16:26:12 GMT

Thank you so much. That's so true you can't buy things with fico points, I guess I'm trying too hard to raise my score up, when I should just continue paying on time and keeping a low utilization.

Re: Car loan paid off

Anonymous — Thu, 20 Aug 2009 00:32:46 GMT

Paying off your auto loan should have minimal impact. I just paid mine off and lost 3 points when the CR was updated. My mixtured of credit right now is mostly credit cards and then an unsecured installment loan.

Re: Car loan paid off

Anonymous — Tue, 25 Aug 2009 10:23:21 GMT

i've paid my car loan and finished the lease on a car i bought for my sister... didn't do anything to my credit score. i always paid on time (auto-debit)..and as far as student loans, they are considered a negative factor on the credit.. it's best that those are paid quickly. i used to be a loan officer and a student who finished with his pharma degree was 90K in student debt and he couldn't even get approved for a credit card or a 10K loan even though his income was over 100K. he had no other installment loans and his credit card balances were less than half of the credit limit.

Re: Car loan paid off

Anonymous — Tue, 25 Aug 2009 13:31:08 GMT

When my car loan reported as paid off, I lost about 10 points. My only other installment loan is my student loan, which is in deferrment, though I have been paying every month anyways. My scores are on the high end though, so it's possibly my larger drop is because of that.

I agree with others, though. As long as you are doing what you are suppossed to be doing with your other credit, ie: cards, then your score will continue to raise, so I wouldn't take on new debt simply to raise your score.

Re: Car loan paid off

Karatz — Tue, 25 Aug 2009 14:48:58 GMT

@Lel wrote:
Your paid-off car loan will continue to appear on your credit reports for 10 years, and will continue to have a positive effect on your credit score. Your student loans and car loan all add to your mix of credit.

If you don't have a need to accumulate new debt (that is, you don't need a new car, a new home, or a new education), then you shouldn't feel compelled to do so just for the sake of your credit score. You can't buy gas and groceries with FICO points.

First I laughed at this, then I realized it wasn't so funny - tell that to detroit auto workers...Mistake I've made in the past is I've paid cash for the last three cars I've bought.