How much should credit score go up when car is paid off??
Last year the company my husband worked for went bankrupt and didn't pay him for 3mths. We fell behind on everything and his credit scrore dropped to like 550. We've caught up pretty well and it's gone up to about 590 in just a couple months. We are about to get that back pay and want to pay off one of the cars. It was a $19k loan and we owe about $6k left on it. If it's paid off a year early and was that much how much (round about) can we expect that to help his score? We're hoping to get up to 700+ by next Spring so we can sell ours and buy a new house. Thanks : )
golferwhoworks2008-07-23T10:26:03Z
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Pengy is correct but rather than pay off that look at paying any revolving debt that you may have down to less than 30% of the available credit limit and that will increase your scores a lot faster
The main problem here is not that you owe on the car, but that you fell behind on everything and that was reported to the credit agencies, and that will remain there for 7 years. Highly doubtfull you will in the 700's by spring.
pay off a motor vehicle loan does make your credit seem stable! each time you shut an account it hurts your score. you're meant to pay off credit playing cards and then as quickly as you visit purchase some thing or each time somebody seems at your score they'll see that obtainable credit and you'd be ideal for greater credit. If it particularly is clever.
I really don't think paying off the car is going to help that much. As long as you are making on time payments then there should not be that much difference. What it will help is your debt to earning ratio if you are trying to buy a house or something.
mortgage companies understand that you need a car so a car loan is not looked at as negative as a credit card--- i would focus on taking that extra money and spreading out amongst all of your debt to get caught up. be deligent about using your credit-live within your income if possible.