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Installment debt

Donovanbrown
New Member

Installment debt

I hear that Installment debt bring down your score, I'm looking to refi in 2months, I owe 2800 on my car, and wanted to know if i should pay it off. will it help bring my score up? i got the loan 4 years ago for 18000, and i pay about 400 a month for it. now if i move it to a credit card with 0% interest i'll pay about $60-80 a month, what do you guys think?
Message 1 of 5
4 REPLIES 4
db23
Frequent Contributor

Re: Installment debt



@Donovanbrown wrote:
I hear that Installment debt bring down your score




Not really true. FICO only hates installment debt with lates. Installment loans that are well into the loan - FICO loves those. FICO likes to see various types of accounts, I'd keep the Auto Loan open, unless you have some other reason for paying it off.

I have actually heard of people experiencing the exact opposite actually. Their scores have gone DOWN after paying off auto loans.
Message 2 of 5
Donovanbrown
New Member

Re: Installment debt

who ever made up credit scores and how they work needs a SLAP!!
Message 3 of 5
fused
Moderator Emeritus

Re: Installment debt



Donovanbrown wrote:
who ever made up credit scores and how they work needs a SLAP!!


What do you prefer, a pimp slap, love tap or major beat down?Smiley Tongue
Message 4 of 5
Established Contributor

Re: Installment debt

if you move revolving to installment debt it frees up your revolving Util which is 30% of your score
People say "Only apply for credit you NEED"

I say "apply for credit you have PRATICAL use of"

I don't have AMEX card because I don't want a card that suffers from PMS
Message 5 of 5
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