If you just paid off a car...how much does your credit score go up?

[gregshin]

I'm about to pay off my car soon in one large lump sum...around $8000.00 How many points does your credit score go up? and soon does it take to effect your credit score?

 

[notfred]

Not much. Probably just enough to allow you to borrow about another $8000.

 

[gregshin]

what? man i would hope if go up more

 

[gregshin]

anyone else?

 

[fredtam]

Originally posted by: gregshin
what? man i would hope if go up more

Why because you paid a loan off early screwing the finance company out of intrest? Your score won't go up much. Time and good payments raise the score.

 

[vi edit]

Actually, from everything that I've read, KEEPING a car loan increases your credit more (assuming you pay on time every month) because it establishes a payment history.

It may go up marginally because you don't have outstanding loans, but nothing overly significant, especially because $8,000 isn't a *huge* amount of money for a car.

 

It won't make a noticable difference in your credit score.

 

[CRXican]

Originally posted by: SampSon
It won't make a noticable difference in your credit score.

wrong, a paid car loan is very good for your credit score

 

[DT4K]

I doubt it will change much at all.
But it will reduce your total monthly debt payments so it will allow you to qualify for a higher amount on another car loan or a home loan. This has to do with your debt to income ratio though that the bank looks at, which has nothing to do with your credit score.

If it was a credit card, your score would increase because the ratio between your available credit and your total balances would be lower. And this is one of the factors used in the calculation of your credit score. But it isn't the same with a fixed installment loan like a car loan.

 

Originally posted by: CRXican

Originally posted by: SampSon
It won't make a noticable difference in your credit score.

wrong, a paid car loan is very good for your credit score

Wrong what?
His credit score won't jump significantly if he pays it off in one lump sum. I've done this before, it didn't make a difference.
His score would be more positively affected by keeping the loan for the long term.
Of course that's a huge scam to make lenders more money via interest.

 

[vi edit]

Of course that's a huge scam to make lenders more money via interest.

Same thing with CC's. Your credit won't go up a point if you pay off your bill every month in full. But you go 6 months paying off half the current balance and that CC company pulls in a couple bucks worth of interest and your score will magically go up.

 

Originally posted by: vi_edit

Of course that's a huge scam to make lenders more money via interest.

Same thing with CC's. Your credit won't go up a point if you pay off your bill every month in full. But you go 6 months paying off half the current balance and that CC company pulls in a couple bucks worth of interest and your score will magically go up.

Absolutly.
It sucks but at the same time it's very logical.

If you have the money in a lump sum to pay off your loan, why did you loan money in the first place?
Mostly defeats the whole purpose of borrowing money.

 

[Mr N8]

How much will it go up if you pay it off normally, making regular payments for nearly 3 years? I just paid mine off, it was a 36 month loan, and I paid it off in 30 months, with just over the normal payment, and always on time.

Also, how long does it typically take for a lending company to report the payoff to the credit agencies?

 

[vi edit]

If you have the money in a lump sum to pay off your loan, why did you loan money in the first place?

For the reward points for charging stuff of course!

 

[Aharami]

Originally posted by: vi_edit

Of course that's a huge scam to make lenders more money via interest.

Same thing with CC's. Your credit won't go up a point if you pay off your bill every month in full. But you go 6 months paying off half the current balance and that CC company pulls in a couple bucks worth of interest and your score will magically go up.

what? really? I have always been paying off my CC bill in full!! I gotta check what my credit score is

 

[Isshinryu]

Originally posted by: vi_edit

Of course that's a huge scam to make lenders more money via interest.

Same thing with CC's. Your credit won't go up a point if you pay off your bill every month in full. But you go 6 months paying off half the current balance and that CC company pulls in a couple bucks worth of interest and your score will magically go up.

My credit score has risen from 620 to 750 over the past two years. All I have is 1 credit card which I pay off in full every month.

 

[DT4K]

Originally posted by: vi_edit

Of course that's a huge scam to make lenders more money via interest.

Same thing with CC's. Your credit won't go up a point if you pay off your bill every month in full. But you go 6 months paying off half the current balance and that CC company pulls in a couple bucks worth of interest and your score will magically go up.

You are right that paying off your bill in full every month may not help your score. If you charge a lot, then pay it off, the snapshot the CC company sends to the reporting agencies could end up being on the day before you made the payment, so it could show a high balance on your credit report even though you pay it off every month.

The important thing with CC's is to keep the balance shown on your report to a low ratio compared to your credit limit. The suggestions I've seen say 20-30%.

<----waiting for Vic to post his "This thread is full of misinformation, let me correct you" post.

 

[Vic]

Originally posted by: DT4K

Originally posted by: vi_edit

Of course that's a huge scam to make lenders more money via interest.

Same thing with CC's. Your credit won't go up a point if you pay off your bill every month in full. But you go 6 months paying off half the current balance and that CC company pulls in a couple bucks worth of interest and your score will magically go up.

You are right that paying off your bill in full every month may not help your score. If you charge a lot, then pay it off, the snapshot the CC company sends to the reporting agencies could end up being on the day before you made the payment, so it could show a high balance on your credit report even though you pay it off every month.

The important thing with CC's is to keep the balance shown on your report to a low ratio compared to your credit limit. The suggestions I've seen say 20-30%.

<----waiting for Vic to post his "This thread is full of misinformation, let me correct you" post.

Hehe... ah, but it is

Your credit score represents your desireability for lenders to lend you money. That means that ideally it should show that you have a history of repaying your debts on time while never quite borrowing as much money as you could afford to.
Paying off your CC bill in full will help your credit score just as much as carrying a balance, but you're right in that all it provides is a monthly snapshot. Having a balance of more than 50% of the limit at any time can hurt your credit score slightly, as it indicates that you might be borrowing more than you can afford to.
Paying off a car loan in full will help your credit slightly by adding another paid in full sastisfactory closed account to your history, but you will lose one active installment account. It's still a positive though, as both your credit score and lenders will reflect that you are once again capable and possibly in the market for taking on some new debt.

 

[PhoenixOrion]

It will go up, but not much.

Check out equifax.com

Pay $9 and you get credit report, score, and a score simulator.

With the score simulator you can see what differing scenarios and which one gives you the best boost.

 

[DT4K]

Originally posted by: Vic

Originally posted by: DT4K

Originally posted by: vi_edit

Of course that's a huge scam to make lenders more money via interest.

Same thing with CC's. Your credit won't go up a point if you pay off your bill every month in full. But you go 6 months paying off half the current balance and that CC company pulls in a couple bucks worth of interest and your score will magically go up.

You are right that paying off your bill in full every month may not help your score. If you charge a lot, then pay it off, the snapshot the CC company sends to the reporting agencies could end up being on the day before you made the payment, so it could show a high balance on your credit report even though you pay it off every month.

The important thing with CC's is to keep the balance shown on your report to a low ratio compared to your credit limit. The suggestions I've seen say 20-30%.

<----waiting for Vic to post his "This thread is full of misinformation, let me correct you" post.

Hehe... ah, but it is

Your credit score represents your desireability for lenders to lend you money. That means that ideally it should show that you have a history of repaying your debts on time while never quite borrowing as much money as you could afford to.
Paying off your CC bill in full will help your credit score just as much as carrying a balance, but you're right in that all it provides is a monthly snapshot. Having a balance of more than 50% of the limit at any time can hurt your credit score slightly, as it indicates that you might be borrowing more than you can afford to.
Paying off a car loan in full will help your credit slightly by adding another paid in full sastisfactory closed account to your history, but you will lose one active installment account. It's still a positive though, as both your credit score and lenders will reflect that you are once again capable and possibly in the market for taking on some new debt.

haha, did I call it or what?
I predicted your arrival 11 minutes before it happened.
Damn I'm good.

 

[DT4K]

Originally posted by: PhoenixOrion
It will go up, but not much.

Check out equifax.com

Pay $9 and you get credit report, score, and a score simulator.

With the score simulator you can see what differing scenarios and which one gives you the best boost.

I've used the simulator at www.myfico.com but I can't remember if paying off an installment loan was an option.

 

[LTC8K6]

I paid off my car loan early a while ago, and I pay my one credit card bill off in full every month. My score was over 800 a month ago. I do use the credit card quite a bit, though.

 

[andylawcc]

not the right answer here but.

didn't you have a SR20DET S14?

 

[gregshin]

Originally posted by: andylawcc
not the right answer here but.

didn't you have a SR20DET S14?

yeap...thats me...i have a mazda mpv paid off this year and now the SR20DET S14 is for sale...