Paying Off Car Loan Lower FICO Score?

[Creditwiser]

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@MarineVietVet wrote:

There seems to be more and more evidence that FICO 08 does not like zero installment loans reporting.

I may have to change my mantra that credit mix does not matter all that much; at least in the eyes of FICO 08.

But I still say that being debt free is always my #1 goal.

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Good point but for us rebuilders, that installment mix makes a huge difference as we're all witnessing. The 10-12 pt hit that I just took from paying off a car loan doesnt matter to me at the moment, but for some it could mean the difference between a mtg approval or denial if it came at the wrong time. 

Now I still have to wait a bit to see what happens when my new car loan begins reporting. Long term it will be a good thing, short term remains to be seen. 

[MarineVietVet]

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@jettech wrote:

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@MarineVietVet wrote:

There seems to be more and more evidence that FICO 08 does not like zero installment loans reporting.

I may have to change my mantra that credit mix does not matter all that much; at least in the eyes of FICO 08.

But I still say that being debt free is always my #1 goal.

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Good point but for us rebuilders, that installment mix makes a huge difference as we're all witnessing. The 10-12 pt hit that I just took from paying off a car loan doesnt matter to me at the moment, but for some it could mean the difference between a mtg approval or denial if it came at the wrong time. 

Now I still have to wait a bit to see what happens when my new car loan begins reporting. Long term it will be a good thing, short term remains to be seen. 

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I understand what you're saying. I've been in the rebuilding stage.

Even when I was in BK being debt free was always my goal and I wasn't concerned about a few points.

But as I say all the time my opinion doesn't bind anyone else to agree with me or cancel their opinion.

[Max-1]

Agree... same goal > credit/debt free.  Does make you wonder just how independent FICO is... looks like they're in bed with the banks.  Have almost no debt, and expect to be totally debt-free in 2 months.  Wonder how low my score will go then!

[Creditwiser]

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@Max-1 wrote:

Agree... same goal > credit/debt free.  Does make you wonder just how independent FICO is... looks like they're in bed with the banks.  Have almost no debt, and expect to be totally debt-free in 2 months.  Wonder how low my score will go then!

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I wonder too. Let us know please.

[9CLINE]

Alerts today stating Cap1 auto finance 0 bal account paid/closed.
Score changes= tu-18,eq-6,ex-13... all decreases. No other changes,not upset just feels good to be debt free...
Just wanted to put my experience in hope it helps someone

[MarineVietVet]

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@9CLINE wrote:
Alerts today stating Cap1 auto finance 0 bal account paid/closed.
Score changes= tu-18,eq-6,ex-13... all decreases. No other changes,not upset just feels good to be debt free...
Just wanted to put my experience in hope it helps someone

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I like your attitude.