Car loan paid off

[Anonymous]

Hi everyone! I will be done with my car loan next month, and it's being paid off on time. Now the only installment account I will have on my report as of next month will be my student loans, which are deferred. I was told that student loans don't have that much of an affect on your credit score so will I have to open another installment account in order to have a mixture in my credit report?

[Lel]

Your paid-off car loan will continue to appear on your credit reports for 10 years, and will continue to have a positive effect on your credit score.  Your student loans and car loan all add to your mix of credit.

If you don't have a need to accumulate new debt (that is, you don't need a new car, a new home, or a new education), then you shouldn't feel compelled to do so just for the sake of your credit score.  You can't buy gas and groceries with FICO points.

[smallfry]

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@Lel wrote:

Your paid-off car loan will continue to appear on your credit reports for 10 years, and will continue to have a positive effect on your credit score.  Your student loans and car loan all add to your mix of credit.

If you don't have a need to accumulate new debt (that is, you don't need a new car, a new home, or a new education), then you shouldn't feel compelled to do so just for the sake of your credit score.  You can't buy gas and groceries with FICO points.

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So a closed car loan still helps with your FICO mix of credit? RU sure?

[Anonymous]

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@Anonymous wrote:
Hi everyone! I will be done with my car loan next month, and it's being paid off on time. Now the only installment account I will have on my report as of next month will be my student loans, which are deferred. I was told that student loans don't have that much of an affect on your credit score so will I have to open another installment account in order to have a mixture in my credit report?

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I can't wait until May.  My car loan will be paid off too.  I will only have my student loans.  No more car payments!!

[Anonymous]

Thank you so much. That's so true you can't buy things with fico points, I guess I'm trying too hard to raise my score up, when I should just continue paying on time and keeping a low utilization.

[Anonymous]

Paying off your auto loan should have minimal impact. I just paid mine off and lost 3 points when the CR was updated. My mixtured of credit right now is mostly credit cards and then an unsecured installment loan.

[Anonymous]

i've paid my car loan and finished the lease on a car i bought for my sister... didn't do anything to my credit score.  i always paid on time (auto-debit)..and as far as student loans, they are considered a negative factor on the credit.. it's best that those are paid quickly.  i used to be a loan officer and a student who finished with his pharma degree was 90K in student debt and he couldn't even get approved for a credit card or a 10K loan even though his income was over 100K.  he had no other installment loans and his credit card balances were less than half of the credit limit.

[Anonymous]

When my car loan reported as paid off, I lost about 10 points.  My only other installment loan is my student loan, which is in deferrment, though I have been paying every month anyways.  My scores are on the high end though, so it's possibly my larger drop is because of that. 

I agree with others, though.  As long as you are doing what you are suppossed to be doing with your other credit, ie: cards, then your score will continue to raise, so I wouldn't take on new debt simply to raise your score.

[Karatz]

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@Lel wrote:

Your paid-off car loan will continue to appear on your credit reports for 10 years, and will continue to have a positive effect on your credit score.  Your student loans and car loan all add to your mix of credit.

If you don't have a need to accumulate new debt (that is, you don't need a new car, a new home, or a new education), then you shouldn't feel compelled to do so just for the sake of your credit score.  You can't buy gas and groceries with FICO points.

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First I laughed at this, then I realized it wasn't so funny - tell that to detroit auto workers...Mistake I've made in the past is I've paid cash for the last three cars I've bought.