MarketWatch site logo shall paying down debt harm my credit rating?
Posted: Dec 14, 2018 4:59 a.m. ET
This will depend in the kind of loan
DeannaTempleton. With credit playing this type of huge aspect in our economic futures, it is not surprising we try to find approaches to maximize our fico scores.
And a typical technique for building our credit ratings is to pay back financial obligation, which will help enhance a credit history, especially if the cardholder is holding a big stability.
It appears rational, then, to assume that the exact same strategy is applicable with other forms of accounts — like an automobile or mortgage, for instance. And when you follow this theory, spending a loan off early sound that is might a great technique for building your credit rating.
Unfortuitously, settling card that is non-credit early could possibly allow you to be less creditworthy, based on scoring models.
In terms of fico scores, there’s a difference that is big revolving accounts (bank cards) and installment loan reports (as an example, home financing or education loan). »
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