Pay as much as you can, as quickly as you can. There is no reason to pay high interest in hopes of getting a higher FICO.
Having a paid auto loan on your report will be helpful enough.
That 16%+ interest rate is really high. Have you tried a credit union? I live in South Dakota, my DH got a 3.5% interest rate on a 3 year car loan with a credit score of 643. Its considered a B score. He also got a .25% off for setting up automatic payments each month. You should give it a try, it might be worth it for you. Best Wishes.
I had an auto loan at 20.5% d/t auto credit score of 520. That was August 2012. Fast forward to May 2013. Leased 2 cars last week for our household w/a CS autoenhanced: 683. What a climb eventhough they are FAKOs. I don't care. On time payments got me that far w/one loan installment. 3 years of on time payments and my FICO goes to 730-ish according to Score Simulator on this site. Oh, and this climb came without CCards or a mortgage.
Last week I decided to get out of my GAS Guzzler and tried a radio advertisement of 'getting you out from under your current loan/car'. I went in and looked things over. This stealership didn't work out but I called the Autonation stealership that I originally financed the Jeep through.
I ended up leasing a 2013 Chrysler 200 limited for the same payment while getting rid of my negative 8K loan and leasing a 2013 Dodge Dart RallE package turbo.
Talk about breathing easier and paying less for gas per month. I am happy!
I just got a loan for $16K for 72 months at 16.78%. My pmts are $360/ Month. My credit score is 638.
I have the ability to pay it off in full by the end of this year. However, from reading other posts, it doesn't look like that will help me much to improve my credit score which is the main goal that I'm trying to accomplish.
Because I want to improve my credit standing, I'm planning to pay off 50% by June'13 and at some point refinance at a lower rate which I expect to be able to qualify for as I continue to improve the management of my credit score.
I have a question for the community:
In order to receive the maximum benefit credit score wise, How long should I keep making payments on my current 16.78% loan before refinancing to a lower rate loan? It seems I've read that paying off a loan too quickly won't benefit me in improving my credit score.
Thank you for your advice!
You want to build credit and have that kind of money to pay loan off that fast.... start a secured loan to yourself (so many credit unions offer them these days... usually 2-4%... secured credit card...
If you can pay this auto loan off in 6 months then do that... your score will follow regardless.... don't carry an auto loan at nearly 17% to build credit!!
What and where did you buy this car from? and what bank financed it?
What's your annual income? What was your down payment?