increase or decrease in score?

[Anonymous]

i have a score of 720.i have 3000 credit limit on my credit card with no balance.i owe 1200 on my carloan that was originally 15000.

if i pay off my car loan my available credit amount will drop to the 3000 mark.will my score go up because i paid off a loan or will it go down because i now only have 3000 available credit?

thanks in advance.

[Jazzzy]

Hi bosnvguy, and welcome to the forums.

Your original car loan of $15,000 was likely an installment loan and, therefore, that amount isn't counted in your available credit. Your available credit is considered to be the $3,000 credit limit on your credit card.

Your score may not be affected at all when you pay off your loan. There are a lot of moving parts to a FICO score, so it's tough to predict. The car loan will continue to report for up to 10 years, so it will still be adding history for you.

Message Edited by LynetteM on 01-07-2010 02:35 PM

[RobertEG]

Lynette, as always, has hit the nail on the head.

Your credit limit is based on your revolving accounts, not your installment accounts.

You have not been granted any further extension of credit based on a car loan, and it is not included in  your revolving credit limit calculation.

FICO scores revolving % util totally differently from  installment loan % util.

I would suggest that you might not want to pay the auto loan, and put payments into higher interest CC accounts that will both reduce your revolving % util, and also your monthly interest debt.  And improve your FICO score.