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Paying off Auto Loans???

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Frequent Contributor

Paying off Auto Loans???

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😀
Message 1 of 12
11 REPLIES 11
Valued Contributor

Re: Paying off Auto Loans???

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.



















Your FICO credit scores are not just numbers, it’s a skill.

Message 2 of 12
Frequent Contributor

Re: Paying off Auto Loans???

I have a Self Lender installment type Loan. Will that help? I also have a personal Loan, will those help?
Message 3 of 12
Valued Contributor

Re: Paying off Auto Loans???

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.



















Your FICO credit scores are not just numbers, it’s a skill.

Message 4 of 12
Frequent Contributor

Re: Paying off Auto Loans???

Thanks for the info!! Very helpful
Message 5 of 12
Valued Contributor

Re: Paying off Auto Loans???

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.



















Your FICO credit scores are not just numbers, it’s a skill.

Message 6 of 12
Frequent Contributor

Re: Paying off Auto Loans???


@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.


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 Smiley Happy. hopefully having the self lender and personal loan installments will help maintain my Fico scores

Message 7 of 12
Frequent Contributor

Re: Paying off Auto Loans???

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

Message 8 of 12
Valued Contributor

Re: Paying off Auto Loans???


@The-Credit-Disciple wrote:

@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.


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 Smiley Happy. hopefully having the self lender and personal loan installments will help maintain my Fico scores


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.



















Your FICO credit scores are not just numbers, it’s a skill.

Message 9 of 12
Frequent Contributor

Re: Paying off Auto Loans???

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

Message 10 of 12
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