We had to pay off our car before getting our home loan. They required that ...

Jan 18, 2021
5:05:59pm

COACHdrn All-American

...even though the alternative would have been an extra $25,000 of cash in our accounts or even towards a down payment.

But they wouldn't approve the home load with those monthly car payments.

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COACHdrn

Bio page: COACHdrn
Joined: Nov 29, 2006
Last login: Jun 1, 2024
Total posts: 18,603 (119 FO)

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Messages

Author

Time

Does paying off your car early really hurt your credit score?

cougarfanatic

1/18/21 5:01pm

I am not sure it is about credit score as much as messing around with your cash,

crack

1/18/21 5:02pm

Anytime you payoff and close a loan (auto, credit card, whatever), the average

Manti

1/18/21 5:06pm

Why would a closed account bring an average down unless it was your longest account?

Radioactive Coug

1/18/21 5:10pm

I've literally seen this hundreds of times. It'll drop the score for a few

Manti

1/18/21 5:12pm

I believe it brings it down but I don't understand why it would be the average account life that goes down necessarily.

Radioactive Coug

1/18/21 5:19pm

Because it becomes a closed account instead of an active installment.

mulletino

1/18/21 6:25pm

That has more to do with not wanting changes during the loan procedure.

CoastalCoug

1/18/21 5:04pm

It closes out a line of credit, and number of lines of credit is one of the

benny1982

1/18/21 5:04pm

We had to pay off our car before getting our home loan. They required that ...

COACHdrn

1/18/21 5:05pm

I think the best course of action for the OP is to talk to a mortgage guy about

crack

1/18/21 5:07pm

Chase once made me close a CC

stoils

1/18/21 5:28pm

That was possibly due to debt to income ratio???

fulano

1/18/21 5:34pm

Here's the bottom line: If your credit score is 780+, it won't matter. It may

Manti

1/18/21 5:10pm

one thing that gives you help on your score is having loans where you've paid off more than 50% of your initial

HarlemCoug

1/18/21 6:16pm

Thank you for all your insights. Much appreciated.

cougarfanatic

1/18/21 6:24pm

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