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Buying a house and getting my first mortgage (close 4/22). Once we're all closed up, my parents would like to pay off my car as a gift. I have about 3 years left and owe about 17k principal on a 28k loan. My current credit card utilization is <1% on 39k (6 cards). My Fico8 range is 818-828. No other active trade lines. 1 closed auto loan. no derogatories.
I'm guessing i'll take a nice hit when the mortgage starts reporting, but generally speaking will I incur an additional fico hit for paying off the car?
@joemomma wrote:Buying a house and getting my first mortgage (close 4/22). Once we're all closed up, my parents would like to pay off my car as a gift. I have about 3 years left and owe about 17k principal on a 28k loan. My current credit card utilization is <1% on 39k (6 cards). My Fico8 range is 818-828. No other active trade lines. 1 closed auto loan. no derogatories.
I'm guessing i'll take a nice hit when the mortgage starts reporting, but generally speaking will I incur an additional fico hit for paying off the car?
No you won't. You might even pick up some points for reducing your number of accounts with a balance and your total indebtedness.
perfect. thanks.
@joemomma wrote:Buying a house and getting my first mortgage (close 4/22). Once we're all closed up, my parents would like to pay off my car as a gift. I have about 3 years left and owe about 17k principal on a 28k loan. My current credit card utilization is <1% on 39k (6 cards). My Fico8 range is 818-828. No other active trade lines. 1 closed auto loan. no derogatories.
I'm guessing i'll take a nice hit when the mortgage starts reporting, but generally speaking will I incur an additional fico hit for paying off the car?
Just an FYI, your FICO 8 scores might not take any hit when the mortgage reports, last mortgage I got didn't change my scores a single point when it reported.
On the other hand, my mortgage scores dropped 20-25 points
It seems the higher your credit score before any changes to credit, the lesser impact it actually has. When I refinanced my mortgage last year, my Fico 8 scores dropped less than 10 points and then rebounded in the next 2-3 months. I am aware mortgage credit uses older Fico versions but being a subscriber to myfico.com I was able to see the affects on my Fico 8 scores before and after the new mortgage origination. Very little impact . However I did just payoff a car loan in February 2021 and will report back the affect of it when it updates on credit. You can see my current scores below.
Thanks for the continued commentary!
It will be interesting to watch. I think I'll be looking to add a couple of new cards as soon as I close so that's going to be an impact. Hopefully grab at least one long term 0% intro offer and then some sort of rewards.
@joemomma wrote:Thanks for the continued commentary!
It will be interesting to watch. I think I'll be looking to add a couple of new cards as soon as I close so that's going to be an impact. Hopefully grab at least one long term 0% intro offer and then some sort of rewards.
@joemomma that is the perfect time to acquire them if you need them!
Updates scores after paying off my car loan in February 2021 open with Toyota Financial Services for 3 years had an effect of 1-5 points lower per bureau for Fico 8 scores. Very little effect.
@Anonymous Are you able to recall how the paid off car loan may have affected your mortgage scores?