Paying Off a Car Loan
The initial act of paying off your car loan early or on time will likely raise your credit score, because the car debt is no longer on your report.
If you have no other payments, including credit cards or other loans, your credit score will stay stagnant.
How much does an auto loan affect credit score?
Taking out a car loan can have a few different effects on your credit score. First, it will increase your total debt load, which may cause a slight drop in your score based on a new credit utilization ratio. And since you’ve just established this loan, there’s no payment history yet.
Does applying for auto loan affect credit?
Looking for new credit can equate with higher risk, but most Credit Scores are not affected by multiple inquiries from auto, mortgage or student loan lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on your credit scores.
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