paid off installment loans?

[jwes2155]

I just paid off 2 installment loans,  what kind of jump can I expect in my credit score?

[Anonymous]

That depends on how long you have been paying them and term, and if you have any other installments. And most definitely what kind of installment. Please provide more information about other installments and terms.

[VLGaffEsq]

Unfortunately, as I recently found out when I paid off my car loan when I sold my Acura RSX, it doesn't raise your score at all.  Plus, if you don't have any other "installment loans" in your file, it could actually hurt you.  NEVER pay off an installment loan early; lenders and the FICO scoring people like to see a variety of credit extended, including an installment loan.  Go figure...

[andyaycw]

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@VLGaffEsq wrote:

Unfortunately, as I recently found out when I paid off my car loan when I sold my Acura RSX, it doesn't raise your score at all. Plus, if you don't have any other "installment loans" in your file, it could actually hurt you. NEVER pay off an installment loan early; lenders and the FICO scoring people like to see a variety of credit extended, including an installment loan. Go figure...

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What about decreasing the balance on the installment loan, but not entirely paying it off?

[Anonymous]

I say if the interest rate is ridiculously high, pay it off anyway. . . especially if it's a car since it depreciates in value the longer you hold it. I understand trying to increase your FICO score but I think common sense dictates paying off high interest debt to the greatest extent possible. Another thing, since it doesn't seem like it boosts your score to pay off an installment loan early, then it probably doesn't help much to pay off an installment loan on time either - so save yourself some interest and pay it off as early as possible.

[smallfry]

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@Anonymous wrote:
I say if the interest rate is ridiculously high, pay it off anyway. . . especially if it's a car since it depreciates in value the longer you hold it. I understand trying to increase your FICO score but I think common sense dictates paying off high interest debt to the greatest extent possible. Another thing, since it doesn't seem like it boosts your score to pay off an installment loan early, then it probably doesn't help much to pay off an installment loan on time either - so save yourself some interest and pay it off as early as possible.

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I agree with that. I think FICO considers a paid installment the same as an ongoing car loan payment as far as scoring goes. Anyone know any differently please chime in. I have five car loans currently showing on my reports. Two were refi's and they will remain until well past 2012. I'm not sure it matters all that much. Credit cards seem to hold the key. Pay on time no new apps and keep the utilization as low as you can. Everything else will take care of itself. Maybe you can tweak the score + or - 20 points but the meat and potatoes is paying those cards on time.