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Topic: Seems counterproductive when paying off a car loan
Replies: 42   Last Post: May 22, 2020 12:17 PM by: grouchingtiger®
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Replies: 42  

Seems counterproductive when paying off a car loan

[6]
Posted: May 21, 2020 10:41 PM
    Reply

Equals a 15 point deduction in your credit score because of a “closed account”. In the old days I wouldn’t care about it, but now that car insurance uses credit scores as a factor for your premiums, it seems the system might be broken just a tad.

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Just like basketball in the Dean Dome

[6]
Posted: May 21, 2020 10:47 PM
    Reply

The game is rigged in their favor

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“When my information changes, I alter my conclusions. What do you do, sir?”
John Maynard Keynes
“Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that my ignorance is just as good as your knowledge.”
Isaac Asimov


Just another mange conspiracy theory.***

[4]
Posted: May 21, 2020 10:50 PM
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I’ve been looking for 15+ years for footage of the Barnes

[14]
Posted: May 22, 2020 12:34 AM
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Smith dustup, and by God, I just found it. For those who were too young to watch this game, this is what made Rick Barnes a legend at CU. I don’t care how he left, I don’t care what he did to Wideman’s girlfriend, I don’t care what he thought about the Clemson public schools....this moment cements him as my favorite Clemson basketball coach.

https://twitter.com/dadgumboxscores/status/1176143791411122176?s=21

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Gahhhhh....supposed to be a new post. Sonoffa........***

[4]
Posted: May 22, 2020 12:35 AM
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Re: Gahhhhh....supposed to be a new post. Sonoffa........***

[3]
Posted: May 22, 2020 6:41 AM
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You got the requisite +1s to make it worthwhile..


Re: And........I think it was Jack Leggett’s first wife***

[3]
Posted: May 22, 2020 7:40 AM
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I always heard cheerleader or rally cat***

[1]
Posted: May 22, 2020 9:43 AM
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Same here, in fact I had a coworker whose daughter

[2]
Posted: May 22, 2020 9:50 AM
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was a Rally Cat at the same time, I just assumed it was her

2020 purple level member

I always thought Barnes got ejected from the game because of

[2]
Posted: May 22, 2020 9:31 AM
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that. Was that just not in the clip, or am I misremembering, Brian Williams style?

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THIS LADIES AND GENTLEMEN...THIS IS HOW A THREADJACK

[2]
Posted: May 22, 2020 12:17 PM
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IS DONE!!!!!

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15 points seems like a lot

[3]
Posted: May 22, 2020 4:29 AM
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if you had the loan for a long time it might affect your average credit age, but car loans typically would lower the average credit age. It should bounce back quickly if that was the only factor.

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Keep the account open and forget about it.

[3]
Posted: May 22, 2020 5:29 AM
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One time several years back I closed about 5 accounts that were just sitting out there. I had 5K in credit opened with HH Gregg even after they went out of business. Anyway it ended up hurting my score. Who knew.

Makes no sense. Guess they think you're being more careful with money than they'd like.


Message was edited by: Tiggity®


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- MauldinT
"Tiggi­ty is like finding a high-motor, Dabo five star heart guy. Underrated by the recruiting services, sort of like a Dorian O'Daniel."


I did the same thing

[6]
Posted: May 22, 2020 5:41 AM
    Reply

now my credit average is only about 5 or 6 years. I closed a 20+ year credit card with 10,000 limit a few years ago, seemed like a good thing at the time. A year or two later I closed 4 or 5 more credit cards that I had opened to get 20% off then paid them off immediately.

My thought was that I didn't want a bunch of old cards out there that I wasn't keeping track of that could get compromised and leave me with bad debt or just the pain of tracking it all down.

I'll do it to get airline miles too. Open an airline card, keep it a year or three then do it again.

Credit Karma account fixed most of that.

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Re: I did the same thing

[3]
Posted: May 22, 2020 7:24 AM
    Reply

From what I’ve read/heard. You’re better off leaving any open accounts “open”, until they expire. Monitor as needed, but if you “close” an account, somehow it reflects negatively on your credit. No idea why.


As it was explained to me they use your total credit

[2]
Posted: May 22, 2020 7:40 AM
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Available as a metric. If you have a ton of available credit and don't use it, your percentage of balances is lower versus total credit available. Even though you forgot about those accounts and/or couldn't access that credit anyway its out there and is used in the score calculation.

It's stupid but it's credit.

For example I put a few grand on my credit card and if I don't pay it off in before the data goes to the reporting agencies, my score drops. That's because the balance on that card is placed against all available credit and beyond that card I have little other credit.

Wonder if I can open a $10000 line of credit buying a $50 gadget at Best Buy. Might do that.

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- MauldinT
"Tiggi­ty is like finding a high-motor, Dabo five star heart guy. Underrated by the recruiting services, sort of like a Dorian O'Daniel."


Re: As it was explained to me they use your total credit

[2]
Posted: May 22, 2020 7:59 AM
    Reply

That’s how I understand it, you’re better off opening multiple lines of credit that you don’t plan on using. The “age of credit” doesn’t impact your score nearly as much as “available credit” does.

So, you’re better off opening as many lines as possible, right? How you use them is a different story entirely.


Re: As it was explained to me they use your total credit

[2]
Posted: May 22, 2020 8:21 AM
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Available credit percentage is about 35%. Average age of accounts is about 20%.


I bought a $1000 laptop about a year ago

[2]
Posted: May 22, 2020 9:58 AM
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and put it on my credit card. It was EOM so it got reported as a balance until i paid it off the next month.

According to Credit Karma, my credit dropped 20 points. It took MONTHS to get that back up, because after I paid it off the next month, my credit dropped ANOTHER 5 points. Actually, this month it just got back to 800, which is the highest its been in 1.5 years.

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Re: I bought a $1000 laptop about a year ago

[2]
Posted: May 22, 2020 10:02 AM
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Yeah, the combination of car loan paid off, putting the engagement ring on a 0% credit card and paying it off piecemeal, I went from 830 to 783 right now.

But considering I'm not buying a hour or car in the near future, I don't really care.

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Cole @ Beach Cole w/ Clemson Hat


Average account age is the #2 factor

[3]
Posted: May 22, 2020 8:11 AM
    Reply

on your credit report other than usage percentage.

When you close an account, it messes with the average age of your accounts.

It's pretty much that simple. It's the reason why I keep a credit card account I haven't used in 8 years open. My average credit age is only like 5 years due to recent car purchase and credit line opening, so if I closed that 8 year-old account, it would negatively affect my "average age of open accounts metric."


Yes, it's crazy how the credit bureaus and their algorithms

[4]
Posted: May 22, 2020 6:37 AM
    Reply

work. When I went thru my divorce and had to kill off some accounts, it hurt my score. Because some of them were 20+ years old. Even though I had a perfect payment history on them, it was a negative because it lowered my "average age of accounts" and my "total number of active accounts". Makes no sense, really. I was basically starting over with new bank accounts, credit cards, etc.

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I'm just trying to keep Anna Lee company...


My daughter graduated 4 years ago

[2]
Posted: May 22, 2020 8:35 AM
    Reply

She paid off her student loan with a signing bonus and had a new job over 70 k per year. No debt, owned her car $600 a month rent and went to her bank to get a credit card.

They gave her a card with $500 limit.

A year later she asked for an increase, they bumped it up to $600. Still no bills got a raise and had a good 10 grand in her savings account.

She also applied to Wake Forest MBA, was accepted and was like the youngest ever they accepted. Her company was paying for it, but she got an email from Wake that offered her $58,000 in financial aid...all she had to do was click the box and hit send. Govt will loan 58k with nothing, bank will loan $600 with solid financial data.

Bizarre. At 2 years her credit jumped to over 700 they bumped her credit card to $5000 She was up to 750 by year three and she was able to buy a house.

My second daughter got a credit card while in college. $2000 no problem even with no job.

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If you bite on the free tshirts in college, you're set.***

[2]
Posted: May 22, 2020 8:41 AM
    Reply



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- MauldinT
"Tiggi­ty is like finding a high-motor, Dabo five star heart guy. Underrated by the recruiting services, sort of like a Dorian O'Daniel."


My credit scroes says my oldest account is 7 years old.

[2]
Posted: May 22, 2020 9:39 AM
    Reply

I've had one credit card since 2004.

I've never had a late payment on anything. But no matter what I do, I can't get my credit score over 804. Its the highest its ever been.

I have no idea how that stuff works.

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I use one card for most purchases, pay it off 100% each mo.

[1]
Posted: May 22, 2020 9:41 AM
    Reply

but the average balance never goes down as I spend about the same every month. I think this hurts my credit rating but I really don't understand the metrics.

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804 is golden

[2]
Posted: May 22, 2020 9:43 AM
    Reply

you will have no problem getting loans with the lowest rates

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Yeah..but thats not the point.

[1]
Posted: May 22, 2020 9:54 AM
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I have a credit card I pay off every month. I have one payment--my house. Shouldn't my score be 860?

Its all fuzzy math.

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Go finance some living room furniture. That should do it***

[1]
Posted: May 22, 2020 10:00 AM
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Re: Seems counterproductive when paying off a car loan

[2]
Posted: May 22, 2020 7:11 AM
    Reply

How much did your insurance go up and how much was your car payment?

2020 white level member

who pays off a loan??

[4]
Posted: May 22, 2020 8:10 AM
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amirite FBCoachSC®



I mean, what idiot would pay off a loan??

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Re: who pays off a loan??

[3]
Posted: May 22, 2020 8:13 AM
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He financed those pallets by the way.

2020 white level member

My very first credit card account was an amazon card

[2]
Posted: May 22, 2020 9:04 AM
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that I put my wife's engagement ring on. Half off on Amazon. 12 months 0 percent interest. Paid it off in 11 months and closed the card.

Credit score went down 16 points.

#### don't make sense.

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I saw a slight decrease last year

[2]
Posted: May 22, 2020 9:10 AM
    Reply

because my oldest credit card went unused for so long they just closed it on me. I was sad about that seeing as that card was locked in at 9.9% and all my others are way higher. I haven't carried a balance, that I paid interest on, since 2010 but now I'm screwed if something does come up.

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Yeah, just checked mine, paid off car loan a few months ago

[3]
Posted: May 22, 2020 9:22 AM
    Reply

and dropped 20 or so on me. Discover's credit scorecard says I now lack a mix of credit types.


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Cole @ Beach Cole w/ Clemson Hat


been told before that my lack of debt is a credit problem

[3]
Posted: May 22, 2020 9:36 AM
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what a totally illogical concept.

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I had to take out two new credit cards before I could get

[4]
Posted: May 22, 2020 9:40 AM
    Reply

my first mortgage. And after that, 2 years later I had to take out another credit card to qualify for a boat loan. I had to have 5 lines of credit open, apparently.

Now I am awash in credit offers.

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What do you mean by "car loan"?

[6]
Posted: May 22, 2020 9:37 AM
    Reply

You're not talking about borrowing money to purchase something as inexpensive as a car... are you?

Did I accidentally click on Amphitheatre?


First pallet porches, then garbage candy, now this.

[5]
Posted: May 22, 2020 9:39 AM
    Reply

How is the UDPs creeping more and more into the lunge?


Re: First pallet porches, then garbage candy, now this.

[6]
Posted: May 22, 2020 9:52 AM
    Reply

Hopefully this helps.



2020 white level member

I bet these clowns have mortgages too

[6]
Posted: May 22, 2020 9:43 AM
    Reply

THIS IS WHY YOU'RE POOR, PEOPLE!!

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Eh, it was a used car loan at 1.9% that I paid off early.***

[2]
Posted: May 22, 2020 9:59 AM
    Reply



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Cole @ Beach Cole w/ Clemson Hat


I find it interesting that even though we've been married

[2]
Posted: May 22, 2020 9:47 AM
    Reply

over 30 years and all our accounts are joint accounts, my wife has a higher score by 25-30 points.

Figgure that one out.

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