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paying of my car loan

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tm61



Joined: 12 Feb 2009
tm61's page
Posts: 2



91 Magic Points

Subject: paying of my car loan
 
Posted on Thu Feb 12, 2009 6:38 pm  

Will paying of my car loan increase my credit score?

I have a 48 month loan at $480 per month.

I have already made over 18 months payments.

Some say this will lower my credit score.
fireyone



Joined: 26 Feb 2008
fireyone's page
Posts: 4246



96 Magic Points

 
Posted on Thu Feb 12, 2009 6:52 pm  

Yes it should raise tyour credit score since it will show you are paying less out a month. It will also reflect on the positive side of your credit report for many years. I believe it is 7 years. Some will say it is better not to close the account entirely because a zero balance is better for your score. Fact is eventually it will be paid off regardless of when it is paid off.
tm61



Joined: 12 Feb 2009
tm61's page
Posts: 2



91 Magic Points

Subject: See This From Morgage1a.com
 
Posted on Thu Feb 12, 2009 9:21 pm  

Installment accounts are treated differently than revolving accounts. In fact, it is actually to your benefit to keep installment accounts in good standing for as long as possible. This means not paying off your car loans or other installment loans early, unless there is an overriding reason to do so.
Mary

Mary

Joined: 06 Jul 2006
Mary's page
Posts: 684



17420 Magic Points

 
Posted on Fri Feb 13, 2009 11:32 am  

If you do not default on your payments, your credit score will improve. This is because as per the FICO scoring algorithm 35% of your score depends on you credit history. So a very good credit history will be set up by this 48 month payment. Try not to default any payment as a default on your payments is considered as negative and will get reflected in your credit report. Once it gets reflected in your credit report it will stay there for seven years and lower your score.
_________________
Where there's a will, there's a way !!
Guest







 
Posted on Fri Feb 13, 2009 2:59 pm  

Sorry, that does not make sense. If you make 20 payments instead of 48, that would also establish a credit history. Why would that be a negative? You would also save mony on interest payments. This would also prove that you have sufficient funds to pay of the loan early. It appears that nobody really noes the correct answer to this question.
sdchargers_63

sdchargers_63

Joined: 13 Aug 2007
sdchargers_63's page
Posts: 1883



1901 Magic Points

Subject: credit
 
Posted on Fri Feb 13, 2009 4:22 pm  

OH YES!!! Making 'timely' car payments, each month, WILL improve your score. That shows responsibility on your part. Try not to miss a payment. Sure will be a 'Positive' item on your CR.
Guest







 
Posted on Fri Feb 13, 2009 5:22 pm  

Of course making timely payments will improve your credit score, but will paying off the loan early hurt your credit score?
Mary

Mary

Joined: 06 Jul 2006
Mary's page
Posts: 684



17420 Magic Points

 
Posted on Sat Feb 14, 2009 1:05 pm  

No, paying off the loan in full never hurts you credit score. In fact it gives a positive image on your report. However, if you are on monthly payments on a loan, you will lose the score that you could have build up as a result of regular payment because payment history has a major role to play in improving your score.
Mary

Mary

Joined: 06 Jul 2006
Mary's page
Posts: 684



17420 Magic Points

 
Posted on Mon Feb 16, 2009 12:10 pm  

Yes, you get favorable interest rate on any new line of credit, but the rate of interest on old credit accounts remains the same. You get the most favorable deal on interest if you have a credit score of 720 and above. So before applying for a new line of credit, make sure you have a good credit score.
_________________
Where there's a will, there's a way !!
cmann1010
Guest






Subject: early payoff!!!
 
Posted on Wed Jan 27, 2010 9:53 pm  

i have a car loan for 72 months! ive been paying twice my car pymt each month since i bought the car! Will paying off the car loan in 3 yrs instead of 6yrs raise my credit and score???
mommy3
Guest






Subject: early payoff downside
 
Posted on Fri Feb 26, 2010 12:05 am  

In order for your payments to reflect on your score, you must pay at least 6 months of tinely payments. trust me, I ruined my credit as a teenager and spent most of my twenties cleaning it up. Now in my thirty's I am finally able to build a home and buy new vehicles. My loan company told me that for every 6 months of on time payments it refelcts positively on your FICO score. So yes, waiting the loan out does improve the score better than an early payoff. However, if you want to payoff early, it is best to do it after the first year so it has raised your score and the early payoff will be better for you as far as the amount of intrest you paid in. Hope this info. was helpful.
Anthony Mitchell
Guest






Subject: car paid off
 
Posted on Wed Mar 07, 2012 9:29 am  

I paid my car off six months early in full would that raise my credit and if i do how many points will i gain from this it was a 42month contract

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