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About to lose my 800 point status? Loan involved

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Regular Contributor

About to lose my 800 point status? Loan involved

I've been reading about points being lost once you pay off your car loan. Only other loan i have is a two year mortgage. So here's my question, should I pay the $3,200 I owe on the car and take the points hit now? Or should I only pay $3000 now and leave the loan open and make the last payment February 2020 when it's schedule to close?

With Toyota, the more i pay now pushes out my next payment due date. My next payment due at the moment is June 2019.

If i pay the remaining $200 in 2020,i won't see the points drop until then.

What do you recommend?
What type of points drop do you usually see?
Original Loan amount $18,025
Balance currently due $3200
Message 1 of 10
9 REPLIES 9
Frequent Contributor

Re: About to lose my 800 point status? Loan involved

If I am reading this correctly you shouldn't take any point loss at all, in fact you may gain some. Once the auto is paid off, you will still have an installment loan being reported open in the form of a mortgage.

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Message 2 of 10
Regular Contributor

Re: About to lose my 800 point status? Loan involved

I thought the mortgage loan was different. I always saw threads of people losing points once the car loan was paid off and the reasons why points drop.
Message 3 of 10
Established Member

Re: About to lose my 800 point status? Loan involved

Pay off the loan if you can afford it. You don't wanna pay unnecessary interest to save a few points on your credit score. You don't wanna try to "buy" a higher credit score.
Message 4 of 10
Regular Contributor

Re: About to lose my 800 point status? Loan involved

My interest rate is 0.9% for 5 years so i think it was about $450 in interest.

 

I’m going to call and pay off this thing. 

 

Message 5 of 10
Frequent Contributor

Re: About to lose my 800 point status? Loan involved


@DU556 wrote:

My interest rate is 0.9% for 5 years so i think it was about $450 in interest.

 

I’m going to call and pay off this thing. 

 


You are on the right track. Pay now, if you can, and get done with it. You may see a slight fluctuation of scores due to "credit mix" and such, but in the long run, you are good. 

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Message 6 of 10
Established Contributor

Re: About to lose my 800 point status? Loan involved

I just refinanced my Chase auto loan, which of course involved paying off the old loan. 

 

My EX FICO 8 score dropped by a whopping 3 points! I do have a mortgage as well as a couple of other auto loans, so paying off one auto loan didn't make much difference. In fact, the minor score drop could have been caused by other factors entirely unrelated to my auto loan payoff, but I'm not aware of any.

 

Of course, YMMV!

Message 7 of 10
Regular Contributor

Re: About to lose my 800 point status? Loan involved

Just wanted to provide an update. I paid off my car 😁 and experian finally reflected that paid off loan. Points dropped by 15. We'll see what the other CB show in the next few weeks.
Im still the 800 score so i guess i shouldn't complain.
Financed with Toyota in case anyone wants to know.
Message 8 of 10
Established Contributor

Re: About to lose my 800 point status? Loan involved


@DU556 wrote:

What do you recommend?
What type of points drop do you usually see?

I would save interest and own the car.  ( Pay off the loan )

You still have a mortgage for credit mix, should not see a loss from car loan paid off.

Fico score loss is dependant on a lot of factors.

No one can give you an accurate answer.

Have seen post of 100 point loss, with all  installment loans paid.

I paid off two mortgages, a car loan and only lost 15 points.

No two profiles see the same loss.

Be debt free, save interest, don't worry about Fico scores.

 

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Message 9 of 10
Regular Contributor

Re: About to lose my 800 point status? Loan involved

Transunion just updated and i lost 17 points with them. I'm still above 800 points on all three so I'm good.
Message 10 of 10
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