topic Re: Paid Off Auto and Student Loan, use Self Lend? in General Credit Topics

Paid Off Auto and Student Loan, use Self Lend?

HappyGoLucky4U — Wed, 29 Jul 2020 12:47:13 GMT

After several years, I finally paid off my auto & student loans! It did impact my FICO score negatively, about 20 points decrease. I understand that having a mix of loan and credit is a good thing. Since the auto and students loans are no longer active and closed, should I get a Self loan so I have an active loan on my credit report?

Re: Paid Off Auto and Student Loan, use Self Lend?

SouthJamaica — Wed, 29 Jul 2020 12:54:54 GMT

@HappyGoLucky4U wrote:
After several years, I finally paid off my auto & student loans! It did impact my FICO score negatively, about 20 points decrease. I understand that having a mix of loan and credit is a good thing. Since the auto and students loans are no longer active and closed, should I get a Self loan so I have an active loan on my credit report?

It's not necessary.

But if you want to pick up some easy points you could get an SSL from a lender like NFCU and immediately pay it down to 9%.

If you do nothing your scores will pick up anyway over time.

It's not "a good thing" to have loans; it's just a way to appease an anomaly in the FICO 8 and 9 algorithms.

Re: Paid Off Auto and Student Loan, use Self Lend?

Brian_Earl_Spilner — Wed, 29 Jul 2020 14:30:54 GMT

I'd rather save lowering my AAoA for something I'll actually use.

Re: Paid Off Auto and Student Loan, use Self Lend?

M_Smart007 — Wed, 29 Jul 2020 17:33:36 GMT

@HappyGoLucky4U wrote:
After several years, I finally paid off my auto & student loans! It did impact my FICO score negatively, about 20 points decrease. I understand that having a mix of loan and credit is a good thing. Since the auto and students loans are no longer active and closed, should I get a Self loan so I have an active loan on my credit report?

You might post your AAoA, So we could get an idea if it would be worth it?

Re: Paid Off Auto and Student Loan, use Self Lend?

HappyGoLucky4U — Wed, 29 Jul 2020 17:41:51 GMT

My current AAoA is 3 years and 3 months

@M_Smart007 wrote:
@HappyGoLucky4U wrote:
After several years, I finally paid off my auto & student loans! It did impact my FICO score negatively, about 20 points decrease. I understand that having a mix of loan and credit is a good thing. Since the auto and students loans are no longer active and closed, should I get a Self loan so I have an active loan on my credit report?
You might post your AAoA, So we could get an idea if it would be worth it?