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Paying off Finance Company Loans

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llsnmerriman
Valued Member

Paying off Finance Company Loans

I have a Citifinancial loan  in good standing.  Its been a couple years, never late, they always report OKs but I have read that finance companies can actually hurt your score bc they are high interest loans.  If I pay this loan off, I only owe 2900.  will this help my score or hurt it for closing positive info.  I also have a auto loan which has 7900 left which has never been late and a CC for 5 months which is never late.  So, should I close out the finance loan early or leave it to continue reporting.  I have been working on my Credit this past yr and after paying off deliquents , having some incorrect info removed, I'm trying to improve my score as much as possible.  I don't want to do something that will hurt my score.  Thanks in advance.

Message 1 of 3
2 REPLIES 2
ShootingStar
Regular Contributor

Re: Paying off Finance Company Loans

bump

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Message 2 of 3
RobertEG
Legendary Contributor

Re: Paying off Finance Company Loans

Installment loans are simply not a big deal in FICO scoring, unless you become delinquent in their payment.

They add to your credit mix.  While % util on an installement ioan has some impact, it is minor when compared wirh revolving credit accounts.

Just pay each installment loan on time.  Put your efforts into the bigger benefit items. Timely and good-standing installment loans are more a benefit than a detriment,.

 

 

 

 

Message 3 of 3
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