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Posted in Auto Loans
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Question By
jasminear21

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would a car dealership paying off your old car loan help build your credit score?
I traded in my old car and they paid off the balance and I then took a new loan out for the new car. I'm wondering if that would help build my credit.

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Yes it will!  Make sure you make all your payments on time.  It may take a few months before your score increases.

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Yep, I traded in a car, got a new one.  Older one paid off and boom, credit score dropped a lot..   Doesn't make sense cause I never missed a payment on the old vehicle either.  Was always on time and always paid more than the amount due each month.

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Yes it would

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will drop!

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I am trying to clean my credit up & thought trading in would help to build mine jus got on tonight to see how much i boosted dropped 35 pts!! THE SYSTEM IS WACK even tho i work hard for my community as a nurse i struggle to provide d/t credit because its so hard to build how bout i go to work pay my bills on time mind my business may i have my home loan plz???

Reply by
jeccak03

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preach!!!

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I want to refinance my auto loan if I disagree with the new terms is it considered a inquiry on my credit report

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Why the dropped..

I believe the drop in credit scores is due to the change in the age of your credit history. For instance, a friend of mine owned her home for 13 years. She got married, sold her home, and purchased a new home. Her score dropped from 800+ to closer to 750. This is because her credit age when she sold her home went from 13+years to now an average of 2 years old. 

Same with trading in your car. If you've had the loan for 2+ years of your 60 month loan term, you have an older credit age. When you trade it in and it's paid off, it falls off as an active account, and your age is now an average of your new account with the others so it drops. 

That's why I haven't  traded mine in. Don't want to drop what I've been working towards. Good idea if you're already a home owner and not "needing" to use your credit for a while. You can possibly get lower payments. Not good if you need to increase your score. 

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why does it take so long

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Why does it take so long for you credit score to reflect paying off your car?

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yes it will help, it will have you in good standing saying you paid your car off early and on time. 

Reply by
HondaGirl925

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So it won't harm my credit if I take my currently financed car to the dealer to trade for a new vehicle?

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paying off car loan

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would paying off a car loan in full increase my score

Reply by
4jdown

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My credit score went down about 20pt. after I paid off my car that I had for the full 60mo term, I would always recomend keeping the loan for as long as possible to maintain your credit score unless you are planning on taking out a new loan.

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Lien on title

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If I have a car title loan out on my vehicle can I take it to the dealership and trade it it in and the will pay it off???

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