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

Jan 18, 2021
5:01:24pm

cougarfanatic All-American

I’m about to buy a new house and they gave me a list of things not to do for the next few months before we close on the house. And one of them was do not pay off your car.
Wouldn’t paying off your car early be a good thing credit wise?

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cougarfanatic

Bio page: cougarfanatic
Joined: Nov 9, 2006
Last login: Apr 25, 2024
Total posts: 4,580 (58 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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