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.
I’d bite the bullet and keep paying it, it looks good on your credit report to have secured credit with a long repayment history.
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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.
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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.