Refinance Auto or Sell? Estimated Score Drop?

[FancyPants1]

Hey All,

Remaing auto loan balance $9600

Newly employed in aviation industry (don't really need vehicle).

Should sell or refinance?

Was offered pay off but am concerned score will tank tremendously. Car credit age 5 years, most tenured acct on credit profile.

Currently have 4 cc, combined reporting 1% utilization but credit age less than 6 months old.

1 collection five years old other wise clean profile.

Current Myfico 8 (686 689 695)

Any suggestions much appreciated 

[SouthJamaica]

---

@FancyPants1 wrote:

Hey All,

Remaing auto loan balance $9600

Newly employed in aviation industry (don't really need vehicle).

Should sell or refinance?

Was offered pay off but am concerned score will tank tremendously. Car credit age 5 years, most tenured acct on credit profile.

Currently have 4 cc, combined reporting 1% utilization but credit age less than 6 months old.

1 collection five years old other wise clean profile.

Current Myfico 8 (686 689 695)

Any suggestions much appreciated 

---

If it's your only loan and it's mostly paid off, paying it to zero will ding your scores, and refinancing it will also ding your scores.

So my advice is to sell it, since you don't need it.

[FancyPants1]

Noted, which action will impact score the most sell or refi.

Also, how long would it take to recover point drop from either on estimate.

Thanks!

[SouthJamaica]

---

@FancyPants1 wrote:

Noted, which action will impact score the most sell or refi.

Also, how long would it take to recover point drop from either on estimate.

Thanks!

---

I don't know the answer to either question.  I just know it would be nice to have some money jingling in your pocket instead of a truck loan payment.

There's a relatively easy and cheap way to recover from, or avoid, some of the point loss: to take out a share secured loan with NFCU or PenFed, and pay it down right away to 9% of the loan amount.

[FancyPants1]

Interesting, I can definitely do that. 

In your experience how did your points increase after refi/sell from installment loan?

Thanks

[disdreamin]

I'd sell in a heartbeat if I didn't need a vehicle. I sold a 7 year-old truck for about 70% of what I paid for it new, and it had a CEL illuminated (needed a $700 sensor), plus some slight rust bubbles starting. Dealership didn't bat an eye, they were happy to get it and I was very pleased with the amount I got for it.

[RSX]

^^ if you don't need a car, NOW is the best time to sell it - you will get the highest amount possible due to the shortage of new and used cars

also - i will never care enough about my scores to keep a loan i don't need - whether it is unsecured or secured by a car

the points hit for 'No Installment Loan' is something like 15-20 points - not a factor if you have a solid profile

(i realize it is a different situation for Rebuild or Builders)

[SouthJamaica]

---

@FancyPants1 wrote:

Interesting, I can definitely do that. 

In your experience how did your points increase after refi/sell from installment loan?

Thanks

---

Points would decrease from refi or payoff, not increase.

[FancyPants1]

Yes it definitely is a sellers market for sure. Happy to hear you got so much back!

[FancyPants1]

You mentioned a short term loan w a credit union would help recover points. Was that your experience after paying off a loan, or you took out a loan and noticed the point increase.