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I currently have a car loan. When I pay it off will my credit score increase?
Asked by
JDiGorio
11 months ago
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Generally speaking, anytime you pay down your debt your credit score should increase. Now that is the common results. With that said, there are over 200 attributes that determine your credit score so the affect of each financial transaction is not always clear.
In one case, using a broad range of credit products can boost your credit score. After your auto loan is long paid off, the value of this variable may diminish if you don’t have any other auto loans. Remember that excellent credit means you demonstrate responsible payment history across many loan types. You should take comfort in that fact that if not having an installment loan lowered your score, it would be a small effect.
JRobertLaw 2 months ago
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I'm sure my score was over 800. What dropped it to 758?
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Asked by SAMSRUN
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Why should paying off(car loan)this loan have a negative affect?And why should" anyone" TAKE COMFORT in the fact that if NOT HAVING an installment LOAN "LOWERED YOUR SCORE"!!!! This makes for stupidity and please note there are two questions here! Also , I seriously doubt these questions will be answered !!!!!! Ty ken
no1mrrythem 11 months ago
I think both questions can be answered with just a change in perspective. As a consumer, you don't start with a high credit score. You have to build it through history and responsibility. Having an installment loan is a way of show more history and responsible credit usage. The more data, the better the score.
CK Moderator
Thank you for the above answer!!However, my point is my score has been dinged for what i truly believe are all the wrong reasons. (1) I do not have a mortgage(I own my home for past ten years!) Sams club cut my limit from 2K to $175.oo (0) balance . They sent me a letter saying because i have no mortgage!! This is nuts!!! (2) Now i am told because i will not have any car payment as of this month ----my score will go down!!! This is also nuts. Ps my scores are in the 800's. This score business is designed for the banks etc. benefit. I agree it has some merit but when you cannot understand the rules you will never win!!! (3)I also understand (some of the rules we never are told) my 30k lineS of credit ARE dropped from my total credit lineBY TRANSUNION AND IS NOT USED IN THEIR UTILIZATION FIGURE!WHY??? ONCE AGAIN THANK YOU FOR YOUR RESPONCE! yOUR COMMENTS PLEASE!AND NO I AM NOT COMPLAINING BUT FEEL BAD FOR THOSE STRUGGLING WITH A SYSTEM THAT IS STAKED AGAINST THEM!!And yes that includes me because i pay all my bills on time--do not have a mortgage nor a car payment and my credit line (sams club)was cut and my credit score has taken two hits!! Sorry, but this does not equate. Thanks again for hearing me out and your concerned input---it is always appreciated! ken
no1mrrythem 11 months ago
Generally speaking, anytime you pay down your debt your credit score should increase. Now that is the common results. With that said, there are over 200 attributes that determine your credit score so the affect of each financial transaction is not always clear.
In one case, using a broad range of credit products can boost your credit score. After your auto loan is long paid off, the value of this variable may diminish if you don’t have any other auto loans. Remember that excellent credit means you demonstrate responsible payment history across many loan types. You should take comfort in that fact that if not having an installment loan lowered your score, it would be a small effect.
JRobertLaw 2 months ago