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Being that there wouldn't be an established payment history, since you're talking about paying it off shortly, it wouldn't hurt your credit, however it wouldn't help is anywhere near if you finance it for a year. Anytime that you open a new tradeline, it can take 6 months to a year for it to positively report on your credit. |
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Sgt Big Red
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Well it sure will not hurt your score, and congratulations if you can do it.
However, you must remember that ones credit score is comprised of 35% payment history and 15% length of credit history. So in total half of your score is based upon what those 2 factors.
Paying it off sooner is good but bad for your payment history as well as length of time.
Perhaps if you have the funds (and I realize you will have to pay some interest) put the money into a 6 month CD or some other form of investment and make regular payments on time for a while, this will build your score because you will now have both the payment history and length of credit history not to mention you will make some $$ to offset the finance charges on the car.
Here is a link to download more about s
FICO scoring and how it works
http://pueblo.gsa.gov/cic_text/money/creditscores/your.htm
All about FICO scoring.
Hope this answers your question. |
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Jim X
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To avoid common mistakes while buiding credit, I recommend this one - http://buildcredit.ifastnet.com - to monitor changes in you score and pre-estimate future scores for different scenarios of payments. |
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southern_silks
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Not necessarily, good credit is established over time so in all honesty, the bureaus that calculate the rating in all probability would give you a better rating if you kept the car for for the term of the loan. You're the one that has to decide if it's worth paying off. However, applying for credit multiple times in a short time span can have a negative effect on credit. Just know your credit score. |
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samstonedredlock
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wow, who's money are you stealing? |
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golferwhoworks
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no since they will not report till your first payment is due |
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Biggie @ Arbor Mortgage
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No it won't hurt your credit & if you paid it off next week, chances are it won't even show you had the loan on your credit report. |
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peterkin101
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No not at all. Your credit rating etc is based on a number of factors such as punctuality of payments, your income, how well you manage your bank account but early repayment certainly won't adversly affect it. However one factor you haven't mentioned is that you may be subject to an early repayment fee. This is to ensure the finance company at least make some money,but these fees etc depend on the agreement you signed. Good luck anyway, it's nice to be in that position. |
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KnowItAll
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no. paying off your loans will never hurt your credit. being late and avoiding payments hurts your credit. |
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Anjell
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No...it won't hurt because 2 days isn't sufficient to report to credit bureau on 1st payment. If you got it....pay it! |
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Marysue
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No. It should help that you’re reducing your debt to income ratio, though you won’t get the benefit of having made regular payments on an installment loan. As long as you have other stuff in your history, that’s not a big deal. |
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N K
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I would wait atleast one month before paying it off so that it appears on your credit. Any credit inquiries which are handled responsibly add to your credit profile. If you pay in the next two days, chances are your account will be closed and paid before it is reported to the credit bureaus. You want this entry on your report because you have managed it responsibly. If you wait one month, you can pay if off since it will be reported. Everything you do well adds up and auto loans and mortgage dont tend to hurt your scores as much as opening new credit cards. Fixed rate and fixed period loans like mortgage and auto loans and student loans are usually not counted against your FICO scores as long as you are not late on them or send them to charge off. In fact they might as well end up improving your score since now you have a good mix of installment loans and credit cards.
FICO scores dont take debt to income ratio, your mortgage lenders do. FICO scores dont care about your income. FICO scores calculate credit utilization which is the percentage of your revolving debt compared to your credit limit. Fixed installment loans like car and mortgage are not considered revolving debt. 30% of your score is your credit utilization. Which is your total available credit on your credit and charge cards versus how much you have on these cards. Keeping that ratio under 10% is optimal. Auto loans is a fixed installment loans and not revolving debt so what you owe on it is not considered in determining your credit utilization. |
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