I am selling my classic car and will have a good amount of cash to pay off some bills. I have been on the credit rebuilding path for about a year and my score has jumped about 100 points. I owe 11k on my truck and need to ask will it be more to my advantage to pay it off or to pay alot of it off so I still have it reporting monthly to CA. Or would I be better off paying a portion of it off so it lowers my total overall debt and I still would have it reporting monthly. Hope this question makes sense. Thanks for your help. John 08/27/07 TransUnion 650 Experian 639 Equifax 658
Your car loan is another type of credit and debt. It is not considered as part of your UT. It does however go into the calculation of your credit mix which is 10% of the FICO equation. Paying off the loan will more than likely not have an impact on your CS. If FICO is important to you, keep the loan and establish some installment (car) loan history. If not, save your money not paying interest and pay it off. Good luck.
If your main goal is your credit score and reports, then maintain the truck loan by making payments. You can save some money (on interest) by making additional "principal" payments, say adding $50-$100/month which pays down the principal balance. This will shorten the loan period, and it will show steady payments, which will help your score(s).
