I have a auto loan that I have had for about 5 months...... I want to sell the car ....it is a 22k loan ..would this help my score or would it remain the same since all installment loans help raise your score either way??
I had two car loans and I paid off the smaller one in the past 8 weeks. My scores have yet to increase. EXP and EQ remain the same. KK
My auto loan 60mo. loan, 12mos old, paid over $6000 in two months, CC balances changed negligibly, wasn't late anywhere. Only the car loan updated on TU this week. I gained a whole FOUR points. $1,500 a point! Ouch.
Installment loan balances don't hurt you that much. Revolving will kill your scores. If you have ANY credit card balances, pay those in full first. Then pay installment loans. Revolving, not installment ratios are key drivers for the score. Remember, these scores are supposed to predict your behavior, your financial stability. The premise is that you'll pay your house and car even if in trouble, but your revolving balances will increase and be the first to go behind a little... that's why revolving ratios dictate score so much. That being said, any loan under 12 mos isn't really going to help your score, and it takes about 24 mos or so to really get score points... but paying down any loan is always smart as it saves you interest... so don't always let the score drive your financial behavior... and don't expect any real score benefit from paying down/off that installment loan. sorry
