Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Auto Loans
Profile Image

Question By
lindsay1219jonesy

0 Contributions
0 People Helped
How long do I need to keep paying my loan to get the most benefit before just paying it off?
credit-wise

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-3 of 3Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
1050 Contributions
590 People Helped

If you have few other credit accounts that can give you more positive payment history? Then you don't really need to continual paying it just for the scoring purpose, as long it shows "paid" and "closed". Closed account with good standing can last 10 or more years on your report, which is a good thing... However, many have reported here, their score dropped when their auto loan was paid off, but ithat's going to happen whether you pay it off now or in 2 years.

Top Contributor
5038 Contributions
1164 People Helped

You may be better to leave the loan open and just pay it down rather than off. It depends on how many other installment loans that you have. But if you only have a total of one or two installment loans currently, then leave it open and don't pay it off. While closed and paid loans are good for your credit they do not have the advantage of open lines of credit. Open lines of credit count the most for credit.

Top Contributor
861 Contributions
317 People Helped

I would suggest applying for a credit card or two, and pay your installment loans off. Paying interest is wasted money.   Use a credit card and pay it off before the billing cycle. Don't charge more than 10% of the credit availability.

Results 1-3 of 3Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.