Paying off car or making payments all the way through which better for credit score?

[maxpr]

Sort of sad I do not know this but...I owe about $1750 on my truck (which I can pay off right now) and save $120 rather than making my final four monthly payments.

Is it better for my credit score to just continue my payments until the final payment in Dec. or would it matter if I just paid it off now to save the $120.

My credit score is good. I have never missed a payment on anything. So, I am not in bad shape or anything but I would not want to adversely affect my credit if I can avoid it.

Off topic question I know, but anyone running a sole proprietorship might be curious.

[Marcie]

The last time I went through the mortgage process they told me my car payment wouldn't factor in because it was in the 12-month window of being paid off. Not sure if that was my credit score thing or a mortgage criteria, but I don't think it will hurt you to pay it off early...except it is true that carrying a balance and having available credit are good things, so if there is a way not to totally close the account, that will be your best option, at least as I understand it.

[maxpr]

The last time I went through the mortgage process they told me my car payment wouldn't factor in because it was in the 12-month window of being paid off. Not sure if that was my credit score thing or a mortgage criteria, but I don't think it will hurt you to pay it off early...except it is true that carrying a balance and having available credit are good things, so if there is a way not to totally close the account, that will be your best option, at least as I understand it.

Oh ok. Great, at least I know there isn't any significant harm in it.

I mean it was a 36 mo. loan and I am paying it off 4 mo's in advance. Just did not want them thinking I was the type of person waiting for a lump of money to pay down my debt and not able to pay the loan through.

Anyhow, sent the check off today, so we will see and thanks for the response!

[brucefenton]

nope- no harm

if an account is opened for a very short time (3 months or so) then closed this can be bad

closing REVOLVING credit will hurt your score (credit cards etc) if you want to pay off a credit card- just pay it and usually dont close the card - this will improve score


dont worry too much about credit -- live beneath your means, save and try to never need it

[maxpr]

nope- no harm

if an account is opened for a very short time (3 months or so) then closed this can be bad

closing REVOLVING credit will hurt your score (credit cards etc) if you want to pay off a credit card- just pay it and usually dont close the card - this will improve score


dont worry too much about credit -- live beneath your means, save and try to never need it

Fantastic. Thanks Bruce and Marcie!