Nice job keeping up with payments all these years! It might seem counterintuitive, but paying off your car loan will likely cause your credit score to temporarily drop a few points.
Your car loan
has more of a positive impact on your score now than it will after you fully pay it off. An account that is open and in good standing, especially if it is several years old, has a more positive impact on your score than an account that is paid off. Once you close the account, the average age of your credit history may drop, which can have a negative impact on your score.
Don’t worry, though, because any change in your score will be small and can disappear after a short time. Think of all the money you’ll save without a car payment!
Another way to save money is by finding lower rates on your car insurance. When you finance a vehicle, the lender requires you to have full coverage. Paying off the loan means you can choose whatever coverage you want.
To help you find lower rates, try using the number-one-rated car insurance app, Jerry
. Jerry compares personalized quotes from over 50 of the nation’s leading providers, including Nationwide, Allstate, and Travelers, so you can get the coverage you need at a great price. The average Jerry driver saves $879 a year on car insurance! Congrats on getting to the end of your loan!