Unsecured Installment Loan Question?

[fused]

I took out a 3 year 5k unsecured loan with a low apr in May 2006.  I have the balance down to $1,980.  I was reading another thread and wondering what I should do.  I can pay it off and have a second account reporting on my CRA's as "paid satisfactorily."  Or I can just pay for the full 3 years and gain more history of on time payments.  I am not interested in interest savings, only interested in improving my FICO scores and overall credit rating.  Any suggestions?  Thank you!

[Tuscani]

Age would help you the most.

[UnderEstimated]

Age will definitely help scores.  My first auto loan was for $12,500.  I ended up paying it off in a year and it shows as paid on-time/ahead.  My scores didn't improve at all since I paid it off so quick.  And I'm kind of in the same boat with my current car.  Sure, I'd love to pay it off in a couple of years (since it is very possible), but I'm thinking I should just ride out the 5 year term.

[MidnightVoice]

If you would save money by paying it off (reduced interest payments) that is good, but it probably will not improve your score much.

If no savings, pay it off and reduce CC and other debt.

If no debt, pay it off and earn interest on it 

[Anonymous]

If improving your FICO score is your one and only consideration, go ahead and keep paying a little at a time.

Of course, you might be able to improve FICO and save interest. Pay off $1600 or so of the remaining loan, then get your monthly payments re-calculated. This way you'd only be paying interest on $300 or so rather than $1900. Plus, if life takes an unforeseen turn for the worse, you'd only be on the hook for a $25 payment each month rather than $100 or so.

I admit I have a bias against carrying significant amounts of debt, so YMMV. And remember if you do pay the loan off, it might not help FICO, but humans analyzing your credit report for a mortgage consideration will give you props for it. FICO is important, yes, but it's not the end-all and be-all of your credit picture.

Message Edited by TheNewWorldMan on 05-21-2007 02:36 PM

[fused]

Thank you all for the tips.