Paid my car loan early is my credit score going to suffer?

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Marcov719
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Paid my car loan early is my credit score going to suffer?

Postby Marcov719 » Mon Jun 04, 2012 11:36 pm

Last week I paid my car loan two years early because I sold the car and made some profit. However, after doing some research some claimed that paying it off too early brings your score down. I only establish about 9 months payment history with my credit union. Should I be worried? I thought paying it off early was a good thing? I'm looking to get another auto loan in the next few months.


Ratfacedudeguy
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Postby Ratfacedudeguy » Tue Jun 05, 2012 12:37 am

It shouldn't have any negative effect at all. If anything it'll show your lenders that you have good auto payment history provided you had no late payments. A lot of times lenders will consider auto payment history as a completely separate category when underwriting an auto loan. Better paid early than late.
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tinninches
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Postby tinninches » Tue Jun 05, 2012 6:16 am

Marcov719 wrote:Last week I paid my car loan two years early because I sold the car and made some profit. However, after doing some research some claimed that paying it off too early brings your score down. I only establish about 9 months payment history with my credit union. Should I be worried? I thought paying it off early was a good thing? I'm looking to get another auto loan in the next few months.


It is possible, since that TL will now report as paid-in-full/closed vs paying as agreed.

What I've done to show a good mix of credit types on my CRs is, of course having CCs, but also taking out a personal loan from the CU and having them use the loan amount to make the pmts (directly from savings), I also asked for a small motorcycle loan, so as to have a different type of TL reporting. The loan was only 1k and the bike was only 3500. Both of which I could (and very much want to PIF), but I know letting them sit and report for a while will be a much better choice for my scores.
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