Paying off Auto Loans???

[The-Credit-Disciple]

Great afternoon Fico Fam😃!!
What are some Benefits of Paying off Auto Loans?

How will it affect your Credit?

Does it help increase your Score?

Thanks in advance Fico Fam😀

[Medic981]

If your auto loan is your only installment loan it will, in fact, decrease your FICO score when it is paid in full. The best situation is if the loan is your only installment loan would be to pay it to 8.99% of the original loan amount and keep it open as long as possible. This would actually give you a FICO score bump.

[The-Credit-Disciple]

I have a Self Lender installment type Loan. Will that help? I also have a personal Loan, will those help?

[Medic981]

To maximize your FICO scores you only need one active installment loan. More installment loans don't add to your score, only thickens your file. You also benefit from three revolving credit cards, as with the installment loan, more isn't necessarily better.

[The-Credit-Disciple]

Thanks for the info!! Very helpful

[Medic981]

I would still pay your auto loan down to 8.99% as you would get a FICO bump. With three installment loans open, you would get a minimal FICO drop when one closes instead of a typical FICO drop when your only active installment loan closes.

[The-Credit-Disciple]

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@Medic981 wrote:

I would still pay your auto loan down to 8.99% as you would get a FICO bump. With three installment loans open, you would get a minimal FICO drop when one closes instead of a typical FICO drop when your only active installment loan closes.

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we already payed off the both Car Loans 3 days ago, I only have 1 personal loan and 1 self lender as my installment Loans currently. paying off the Car Loans increased our overall money that we save each month going forward. thats great for us in the long run . hopefully having the self lender and personal loan installments will help maintain my Fico scores

[The-Credit-Disciple]

I have Credit Card accounts also( 7 CC accounts to be exact)

[Medic981]

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@The-Credit-Disciple wrote:

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@Medic981 wrote:

I would still pay your auto loan down to 8.99% as you would get a FICO bump. With three installment loans open, you would get a minimal FICO drop when one closes instead of a typical FICO drop when your only active installment loan closes.

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we already payed off the both Car Loans 3 days ago, I only have 1 personal loan and 1 self lender as my installment Loans currently. paying off the Car Loans increased our overall money that we save each month going forward. thats great for us in the long run . hopefully having the self lender and personal loan installments will help maintain my Fico scores

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If you do not have an emergency fund, then may I suggest you start contributing part of your additional disposable income to one. I have a minimum of three months of savings to pay my bills in case of a job loss or illness until disability kicks in.

[The-Credit-Disciple]

Thats the Plan!! we freed up money to do just that by paying off the Cars. you are "Awesome" I love the way you think