I refinanced 12K through a small local CU from 9/13-2/16 when it was paid off. Was never late. Loan still shows open in good standing on my CR 4 yrs later. Is this good, bad, or insignificant?
@PandaGirl77 wrote:I refinanced 12K through a small local CU from 9/13-2/16 when it was paid off. Was never late. Loan still shows open in good standing on my CR 4 yrs later. Is this good, bad, or insignificant?
Good if it's your only open installment. Could be bad for DTI since the (perceived) loan payment would be included in that calculation. I'd say fairly insignificant otherwise depending on the balance reporting on the loan.
@thornback wrote:
@PandaGirl77 wrote:I refinanced 12K through a small local CU from 9/13-2/16 when it was paid off. Was never late. Loan still shows open in good standing on my CR 4 yrs later. Is this good, bad, or insignificant?
Good if it's your only open installment. Could be bad for DTI since the (perceived) loan payment would be included in that calculation. I'd say fairly insignificant otherwise depending on the balance reporting on the loan.
If you have another open installment on your reports, then there's no reason not to have the CU loan updated to correctly reflect closed on your reports, unless closing it out dramatically increases your aggregate loan utilization percentage.
I'd probably contact the CU directly though and ask them to provide a status update to the bureaus rather than file a dispute through the bureaus.
@thornback Good advice, I will call them. I'm concerned now it would affect my DTI ratio. I have a Cap1 auto loan that im actively paying on.
Just keep in mind that you may experience a bit of a score drop due to loan utilization. Loan utilization is based on aggregate, not individual. So if the balance of the CU loan is currently really low (which I assume it is) then it's helping your loan util... once it's closed out, only your current loan will be considered so if that balance is high, then you will likely be penalized.
So, do the math. If your util will spike - then you could leave as is til you pay the current loan down more. As for DTI - if a lender uses that as a reason for denial - you could always recon the decision and explain the account is not correctly reporting as closed and show proof of payment.
Think about it a bit and do what's best for you. I just don't want you to be upset if you see a score drop after closure 😊.
I never wouldve thought of that and that absolutely makes sense.