Keep the Information Flowing
Small contributions go a long way. Your donation to Consumer Action, a 501 (c)(3) nonprofit, nonpartisan organization, can help us cover the cost of research, writing, and translation of our materials. To keep our services free for those who need them. Select an amount to give.
Released: November 20, 2012
Arrange car loan in advance for better interest rate
Source: Liz Weston, L.A.Times (Free Registration)
I recently bought a new car, and the dealer, after running a credit check, told me my Experian score was 783. I have had only credit cards and no loans. This is my first auto loan. They gave me a 3.5% interest rate and I took it reluctantly. If I am able to pay off my loan in a couple of months (instead of the original five-year loan term), will this improve or adversely affect my credit score? How will this look in the eyes of future lenders? Answer: Paying off debt is a good thing, both for your credit scores and your wallet. The leading FICO credit scoring formula likes to see a big gap between your available credit and the amount you're using. This is particularly true with revolving accounts, such as credit cards, but your scores also get a boost from paying down installment debt, such as auto loans and mortgages.Read Full Article: Arrange car loan in advance for better interest rate
Quick Menu
Support Consumer Action
Join Our Email List
Consumer Help Desk
- Help Desk
- Submit Your Complaints
- Presente su queja
- Frequently Asked Questions
- Links to Consumer Resources
- Consumer Service Guide (CSG)
- Alerts
- Consumer Booknotes