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| *Loan,banking and credit>>>auto loan |
Does paying off my auto loan improve my credit score? |
Does paying off my auto loan improve my credit score? Paying off all of your debts immediately does not help you with improving your credit. Because you should show lenders that you are a good BORROWER. Your existing report shows lender that you pay your payments in full once you have money and you don鈥檛 when you are financially in trouble. Therefore you are not a good borrower to a lender (you are risky and they don鈥檛 make money out of you). So here some stuffs I suggest to do to polish your credit report and improve your credit: 1) Do not spend more than 1/3 of your limit. That's a rule. Say you have $500 credit limit. So do not spend more than $150 with your credit. 2) Do not pay your existing credit balance in full every month. Pay more than minimum payment but do not pay full. Say your minimum due is $10. I suggest you to pay like $50-$70 each month. Yes you should pay some interest but that's a price to improve your credit. 3) There are lots of articles here which you can find useful to boost your credit. http://www.howtoestablishgoodcredit.com/... Source(s): http://www.howtoestablishgoodcredit.com/... I don't know if your credit score will improve, but your debt to income ratio will improve. Any time you can pay off a long-term debt like an auto loan, it's a good thing. I am not a credit advisor, but I did recently pay off two auto loans and saw my credit score soar. I learned from this guide, linked below. Hope this helps! http://www.quickenloans.com/mortgage/art... Yes paying any debt off improves your credit. Yes. |
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