cancel
Showing results for 
Search instead for 
Did you mean: 

How Much Will A New Auto Loan Affect My Credit?

Highlighted
Valued Contributor

Re: How Much Will A New Auto Loan Affect My Credit?

Your grace, if you're talking about Experian subscription, it updates once everyday at 3am, if the loan is reporting, the score is probably already updated as well.
Message 11 of 14
Highlighted
Senior Contributor

Re: How Much Will A New Auto Loan Affect My Credit?


@Queen_Etherea wrote:

So I just bought a new car ("Buy First New Car" achievement unlocked) and I traded in my old car, which I still owed about $10,000. I put $5,000 down, which covered the amount I was upside down on, plus put about $2,500 towards the new loan. Right now, I have PenFed reporting my auto loan (no missed payments for the past 18 months) and am waiting for Honda to pay it off.

 

My question is how much do you think paying off the old loan and adding a new loan is going to affect my scores?

 

When I bought the original car, I didn't have any kind of loan on my credit report. The dealership screwed things up because I told them I was financed through PenFed and I will give them the check as soon as I get it in the mail. Well, the finance guy didn't listen and ended up financing me through Chase. So when I got the check from PenFed, they paid off the loan for Chase, and it shows on my reports as the account being opened and closed basically on the same day, but in good standing. Once it hit my reports, my score dropped 50 points! Can I expect the same thing once my old PenFed loan is paid off and the new Honda one starts reporting?

 

PenFed

Original amount:  ~$13,500

Paid down to:  $10,301

 

Honda Finance

New Loan:  $22,941

 


No, you should not see a 50 point score drop.

 

My guess is perhaps 20 points this time. Your B/L will spike up and that will drop your score a bit. Part of the total score drop is associated with the new account dropping your installment AAoA. The old loan will still be on file and that helps stabilize installment loan AAoA. Also, you student loans are now actively being paid down and that helps stabilize both open and closed installment age history.

 

Side note: I gather from other thread you have quite a few new revolving accounts so you are already well below 12 months on AoYA.

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 12 of 14
Highlighted
Established Contributor

Re: How Much Will A New Auto Loan Affect My Credit?


@Thomas_Thumb wrote:

@Queen_Etherea wrote:

So I just bought a new car ("Buy First New Car" achievement unlocked) and I traded in my old car, which I still owed about $10,000. I put $5,000 down, which covered the amount I was upside down on, plus put about $2,500 towards the new loan. Right now, I have PenFed reporting my auto loan (no missed payments for the past 18 months) and am waiting for Honda to pay it off.

 

My question is how much do you think paying off the old loan and adding a new loan is going to affect my scores?

 

When I bought the original car, I didn't have any kind of loan on my credit report. The dealership screwed things up because I told them I was financed through PenFed and I will give them the check as soon as I get it in the mail. Well, the finance guy didn't listen and ended up financing me through Chase. So when I got the check from PenFed, they paid off the loan for Chase, and it shows on my reports as the account being opened and closed basically on the same day, but in good standing. Once it hit my reports, my score dropped 50 points! Can I expect the same thing once my old PenFed loan is paid off and the new Honda one starts reporting?

 

PenFed

Original amount:  ~$13,500

Paid down to:  $10,301

 

Honda Finance

New Loan:  $22,941

 


No, you should not see a 50 point score drop.

 

My guess is perhaps 20 points this time. Your B/L will spike up and that will drop your score a bit. Part of the total score drop is associated with the new account dropping your installment AAoA. The old loan will still be on file and that helps stabilize installment loan AAoA. Also, you student loans are now actively being paid down and that helps stabilize both open and closed installment age history.

 

Side note: I gather from other thread you have quite a few new revolving accounts so you are already well below 12 months on AoYA.


Very well below 12 months lol.  I checked my scores this morning and nothing changed. The new loan was added to my reports yesterday, so if there was any score change from it, I would've seen it today. It only lowered my AAoA from 2 years and 2 months to just 2 years. I'm sure something will change once the old loan reports as closed. I'm honestly not too worried about it right now as I'm not going to be applying for anything any time soon. Of course, I would like to raise my scores, but at this point, the only thing that's going to raise them is time. I'm hoping to get some CLI's on my Disco and Amex cards as well. Not sure if the new loan will hinder that in any way.

I think I've found the sacred map that may lead me to this garden everyone keeps talking about.



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 13 of 14
Highlighted
Established Contributor

Re: How Much Will A New Auto Loan Affect My Credit?


@oldman87 wrote:
Your grace, if you're talking about Experian subscription, it updates once everyday at 3am, if the loan is reporting, the score is probably already updated as well.

Oh I like the sound of "Your grace" Smiley Wink  Fun fact:  I got the name from a show called The Venture Bros. on Adult Swim. Seriously the best show ever! Queen Etherea was the name of one of the supervillains wife before she married him. It's not a completely obvious reference, so that's why I love using this username.

 

Checked it this morning and nothing changed. I didn't know it updated at 3:00 am. I could've sworn I've checked it around midnight before and it had already shown a change in my score. I check that app way too often...

I think I've found the sacred map that may lead me to this garden everyone keeps talking about.



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 14 of 14
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.