This is one of the scoring myths that may be hard to believe. When you pay off an installment loan, there may be a slight positive impact to your FICO credit score, but very little. And, in many cases your score won’t change at all.
What impacts your score is not paying your installment loans on time, how many days or months you have been late, and how many times you have been late. For example, being 90 days past due twice, impacts your score more than being 30 days late once.
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