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can paying my car loan raise my credit score?

by bbrown038734 from , California. Jan 29th 2015 Reply


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Jan 29th 2015
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Dave Metsker (DaveMetsker)
#37 ranked lender in Oregon - 2,317 contributions

Paying off your car loan will increase your borrowing capacity for a mortgage, but my have little affect on your credit score.

Jan 29th 2015
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Blake Kleckner (BlakeK)
#387 ranked lender in California - 258 contributions

Maybe, maybe not. There is much mystery around why FICO scores go up and down. One would think that less debt would result in higher scores, but not necessarily. Unless you have your credit report pulled just before you pay off your car, and then right after, there is no way to determine if the payoff will make a difference. The only way to have your credit run within days of the payoff is by having a Rapid Rescore or Quickscore done through a mortgage company's, or bank's, credit reporting service. It can facilitate the elimination of this debt within 4 to 6 days, hopefully, before any other transactions occur with your other creditors that could affect you scores.

Jan 29th 2015
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

It depends on your overall credit what impact it will have, but paying it off will make you eligible for a higher loan amount

Jan 29th 2015
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

It depends on how much "Open" credit you have.. it will have either no affect or could lower your score if you have limited open credit accounts.. but it will definitely give you more buying power, since the less debt you have, the more you can afford for a housing payment.. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Jan 29th 2015
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,240 contributions

Really depends if you mean paying it off or making additional payments. Paying it off may or may not help, I'd run that option through our "credit analyzer" before I told you to do it.

Jan 29th 2015
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Jason Vondrak (jvondrak)
#217 ranked lender in California - 1,741 contributions

It depends on the other credit lines that you have open as well as your amount of available credit.

Jan 30th 2015
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Jericho Cherry (Jerichocherry)
#56 ranked lender in Virginia - 1,107 contributions

It may or may not lower your credit score, but it will reduce your DTI (debt to income) ratio.

Jan 30th 2015
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,112 contributions

I believe that paying off an installment loan (your car loan) will not increase your credit score if you pay it off early. You receive a better score on installment loans over time with on time payments. Most lenders will have a What-If option with the credit company they use and can run the scenario for you to see what would happen to your score if you did. There might be other options to help improve your credit score. Talk with a local loan officer and have them review your credit to see what your options are. Best wishes, Sean

Feb 1st 2015
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