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Posted in Auto Loans
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Question By
Diganta

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Can I raise my credit score if I finish my car loan early?
Can I raise my credit score if I finish my car loan early? My car loan is for 3 years duration. But I would like to finish after completion of 1 year. Will it affect my credit score.

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Installment loans tend to be weighted lower than Revolving accounts when it comes to credit, however, lowering your overall debt-to-income ratio can improve your score.

But, it gets a little tricky, if paying off and closing your car loan early closes your only open account (e.g. you have no credit cards, mortgage, store cards, etc.) then your portfolio strength could deteriorate over time because of no "recent history".  If you do have other open lines of credit, then this is not an issue.

It doesn't hurt to pay it off early, it *might* help, and it gives you extra money each month to budget, save, or invest.  I say go for it if you can swing it :)

Reply by
meemoon

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Last August, I paid off my car loan balance 24 months early but my credit profile doesn't show this. How can I update this info?

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