I recently purchased a vehicle and took out an Auto loan from the local credit union. I have run into some extra cash and can actually pay off the car completely. I have a very little credit history, mainly credit cards that are paid off completely each month with no interest accrued. I was wondering will paying off this loan early hurt or help my credit for future purchases, i.e. a house?

  • Not having a credit history can't "hurt" your credit, but you're right that it can prevent you from getting more credit. How long have you had your credit cards? Commented Jan 10, 2011 at 21:08
  • Duplicate of: money.stackexchange.com/questions/5468/…
    – StasM
    Commented Jan 11, 2011 at 20:32
  • @Stasm i thought I had searched enough to see if there were any dupes... sorry Commented Jan 11, 2011 at 20:41

3 Answers 3


I doubt it.

If you have a good track record with your car loan, that will count for a lot more than the fact that you don't have it anymore.

When you look for a house, your debt load will be lower without the car loan, which may help you get the mortgage you want.

Just keep paying your credit card bills on time and your credit rating will improve month by month.

  • But what about this term I hear from banks "credit history" where 'they' tell me that they need to see a history of credit where money has been loaned and a history of payments have been made... Commented Jan 10, 2011 at 20:27
  • @Kronos - they also look for a mix of credit types (mortgage, car loan, revolving credit, student loans) and those would help too.
    – MrChrister
    Commented Jan 10, 2011 at 22:18

Doubtful. But even if it does, it would be by a minuscule amount and would be a temporary bump. I find it hard to believe that such a small and short term impact on your credit would outweigh the savings in interest charges.


Nope. If there is no prepayment penalty go for it. Find another credit source to use (like a credit card you pay off every month) if you want to get a long history.

Saving money on interest is more important to me than minutia in a credit score.

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