Do refinance improve credit history? and credit score?
Hi guys.. i had a autoloan for $15000 i paid $5000 and refinanced it with another financial institue for lesser APR. my credit report right now shows my old account as fully paid. and the new account with the refinanced amount. Does the closed old account $15000 add to my credit score and does it improve my credit score? becoz i repaid the whole amount. does it work in that way? any body to help me?
Public Comments
- There is no exact science to your credit score. However there are 5 major attributing factors to your credit. They are weighted as: 1. 35% is your payment history (paying bills on time) 2. 30% is your debt to credit ratio (ex credit card: $3000 bal with $10000 limit = 30% ratio) 3.15% length of history (how long you ve had a credit card/car loan open) 4. amount of credit limits (the higher the limits the more "credit worthy" you are) 5. amount of times your credit gets pulled (keep to less than 4/mo!). The short answer to your question is yes. But it depends how long you have had that car loan for. You never want, if possible, to close/pay a credit line or car loan any earlier than 6 months. So as long that holds true to your situation, your credit should have a positive result considering that it was your ONLY variable in your credit (i.e. no other late payments, no other credit lines taken out etc....) Since the refinance was used to pay off the car loan, yes it can/should improve your credit score. Hope that this helps!
- Credit Score Myths Explained http://www.debt-loan-refinance-mortgage-credit.com/category/Credit-Score-Myths-Explained.html
