Pale Rider Posted October 9, 2003 Report Share Posted October 9, 2003 I have read many times that an account should be paid at least 6 months before any payoff or closure. I can't recall ever seeing any details as to why this is important or how it affects your score. I have a secured account through my credit union that is 5 months old that I want to pay off ASAP. I can wait one more month, but just want to understand the importance of the 6 month time frame for future reference.Thanks for any info. Link to comment Share on other sites More sharing options...
kb9tbq Posted October 9, 2003 Report Share Posted October 9, 2003 Length of time established with creditor - contributes 15% to the scoring.Seems like these accounts affect the scores in steps like 6 months / 1 year / 2 years... just seem to be certain set times that you want to stretch out for on the history to benefit the best.Of course the older an account is maintained the better... like 10 - 20 years. Say what about this... pay all but $50 or so on the loan then make the minimal payment for the rest of the period. That is what I have done in the past... so if interest is an issue - you just eliminate the bulk of the balance contributing to them making interest off of you. Link to comment Share on other sites More sharing options...
Pale Rider Posted October 9, 2003 Author Report Share Posted October 9, 2003 The interst rate was not an issue, 3.5% since it was secured. I opened the account to have a good tradeline, and to establish credit with this credit union. Unfortunately, they only report to Equifax, and they have done some things to lose me as a customer. That's the reason for the payoff, I plan on closing my accounts with them and moving elsewhere. But, I was curious as to how these things work if I decide to get another secured loan at new bank. Link to comment Share on other sites More sharing options...
kb9tbq Posted October 9, 2003 Report Share Posted October 9, 2003 Well for a secured loan... that is not going to bear on the scores like credit card accounts do, so I think you have some room here to take your business elsewhere with another bank / or credit union. They are more personable, to explain that you ended your relationship early do to poor service with said company and that was the only reason for finishing the loan off early. I think you will be fine here... installment loans are always a nice add.. not often I see people utilizing on establishing more of these. So I think you next one will contribute as well to increasing the scores. Link to comment Share on other sites More sharing options...
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