I got my car (2020 Ford Fusion Hybrid SE) new 3 years ago at $25k for a 6 year loan @ 0% interest for entirety of loan, $350 a month payment. I’m about halfway paid off and have about $12.5k left on it. What should I do? I just get sick of paying $350 a month.
Paying off early and closing the account will drop that for a little while though. I just paid off a personal loan 4 months early and mine dropped by 21 points.
How are you checking your credit score? Frequent hard-pulls of your actual credit score would show up on your credit report and actually lower your credit score on it’s own.
I’ll bet you’re using a service like credit karma which pinky-promises it is properly calculating your credit score. But is it really?
Nah their scoring model weighs different things differently. And over the past decade, I get a sense that they put more value on your open lines of credit themselves over closed credit in order to encourage people to open more credit cards (which is good business for banks, but not the customer).
https://www.cnbc.com/select/credit-karma-vs-fico-credit-scores/
Don’t put too much faith in those services to give you an accurate credit score, and personally I wouldn’t allow them access to my personal information - that’s just another avenue of attack by a hacker if they compromise the CreditKarma mainframes and steal your info.
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Your credit score isn’t about how good you are at repaying your debts, it’s about how reliable you are at generating and paying interest to your creditors. They don’t care if you pay it off, so long as you keep making monthly payments. That’s why you’ll get refinancing offers when you’re close to paying off a loan, they want to keep those interest payments coming. Even if you’re not paying interest now, they still want to see that repayment history.
Many people seem to forget credit scores didn’t exist before 1989. Decades ago a wife would have to get permission from the husband to open a line of credit with a department store.
Credit scores were built to help the banks, not the average person.
Not only that, but getting a mortgage before credit scores sucked. It’s never been easier to get money other than the ninja loans in the 2008 mortgage crash. Loans were only a thing for white people with bosses that liked them, or high status jobs like doctors and lawyers.