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No. Paying off an installment loan early causes no increase in your score. Installment loans are opened for a set amount, with terms of repayment at a set amount. This is what (ideally) both the lender and credit scoring software are looking to see: That you understand this concept and will pay the loan back over time, on-time. That translates to no appreciable benefit for paying early. However, it is (sometimes) possible to reap monetary benefits. Most installment loans are fixed rate loans. You borrow $X at X% and will pay back the full amount regardless of when you pay. But, if you happen to obtain a compounding interest installment loan (similar to a mortgage loan), there may be significant savings in paying off early. So, while this wouldn't help your credit score in any way, it might save you some $, if you have that specific type of loan. You should be able to find out by reading your loan documents or calling your lender. You may also have a pre-payment penalty. That's another good reason to read your loan docs thoroughly.

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โˆ™ 2005-11-08 15:43:09
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Q: Does paying off a car loan within a couple of months raise your credit score?
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If your credit score is 590 and you are paying everything on time how much will it go up in 6 months?

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Information about paying off credit cards can be found on sites that deal with credit problems. There you can find places to go to to help pay off your credit card debt within your budget.

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Does paying off collection accounts help your cred?

Not always. Paying a collection refreshes the date of last activity. The FICO algorithm considers the last 6 months of activity to be the most important which means that it has the most impact on a credit score. Paying an old collection puts that collection back within that 6 month period and lowers your credit score on many occasions. The rule of thumb is Pay collections which are active within the last 6 months and do not pay collections which have been inactive for over 2 years. Use your best judgement for everything in between.

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The deferral option itself will not have a significant effect. The debt to credit ratio that might be incurred during the time period, will definitely change a credit score. Therefore, deferred accounts can have a negative impact on the CR.

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With three accounts in collections can you raise your FICO score quicker by paying them off in full one by one or by making payments on all of them?

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