Auto loan question

[Anonymous]

Hello, 

I financed a car 21 months ago. When I financed it the auto loan guy told me that if we make 18 on time pmts that my credit score will go up 75 points.

Is this true because I am about to make my 22nd on time payment and my score has only gone up a few points every few months. No drastic increase after the 18th pmt or even since then.  I do have 2 unpaid medical bills

on my report that I am working on but shouldnt the auto loan on time pmts have raised it by the 18th pmt.  Unless he was wrong ? 

[iheartwings]

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@Anonymous wrote:

Hello, 

I financed a car 21 months ago. When I financed it the auto loan guy told me that if we make 18 on time pmts that my credit score will go up 75 points.

Is this true because I am about to make my 22nd on time payment and my score has only gone up a few points every few months. No drastic increase after the 18th pmt or even since then.  I do have 2 unpaid medical bills

on my report that I am working on but shouldnt the auto loan on time pmts have raised it by the 18th pmt.  Unless he was wrong ? 

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Um...I take anything that comes from a car dealership with a grain of salt.

Everyone's credit profile is different, but your score should go up as your balance to loan (aka loan utilization) ratio continues to go down. If you visit the Understanding FICO Scoring forum, you'll find threads talking about probable thresholds where you might gain points. It appears you get maximal points when your balance to loan ratio is 10% or less. 

I mentioned that everyone's profile is different, so it's hard to say how much your score will increase as you pay down your loan. As my auto loan was paid down, my score only went up 7-15 pts, but fell by a greater value (20+pts) when my loan was paid off and the account closed. I have other installment loans (e.g., student loan).  Your derogs falling off will likely have more of an effect (because of rebucketing and such) - I will tell you that I have an old BK on my CR...it fell off TU and my score jumped 60 points. 

[SouthJamaica]

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@Anonymous wrote:

Hello, 

I financed a car 21 months ago. When I financed it the auto loan guy told me that if we make 18 on time pmts that my credit score will go up 75 points.

Is this true because I am about to make my 22nd on time payment and my score has only gone up a few points every few months. No drastic increase after the 18th pmt or even since then.  I do have 2 unpaid medical bills

on my report that I am working on but shouldnt the auto loan on time pmts have raised it by the 18th pmt.  Unless he was wrong ? 

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I believe your score will go up slightly as you pay the car loan down, but the sweet spot will be when you get the balance down to below 10% of the original loan amount.

How many points depends on your profile. The car dealer's prediction of 75 points is meaningless.

If you have other installment loans, their condition could be important to gauging the scoring impact of paying the loan down.

In my case the car loan hitting cost me around 30-35 points on average in FICO 8. Some of those points came back to me, but all the points came back to me only when I'd reached 9%.  The number of points regained was pretty much equivalent to what I'd originally lost by taking out the loan in the first place.

[Anonymous]

The auto loan guy either was mistaken or was a typical salesman and was thinking about what he needed to say to close the deal.  The latter is most likely.

The folks here can advise you a bit better if we have a list of all of your installment accounts, including the amount of the original loan and the amount.  Installment accounts include mortgage loans, auto loans, personal loans, student loans, etc.

If you have other loans besides this particular car loan, then these accounts also matter and the car loan can't be considered in isolation.

What is the normal length of this particular car loan?  36 months?  48?  60?