Does paying a loan off early hurt credit rating?

600sqn

Does paying off loans early as in paying off a 6 month loan after 3 months harm your credit file/score?

I’d presume not as it’s showing eagerness to pay and hopefully good money management, but on the other hand - financial institutions won’t make as much out of you, as I’ve saved way over one hundred pounds in interest by paying off early?

boo_star

600sqn wrote: »

Does paying off loans early as in paying off a 6 month loan after 3 months harm your credit file/score?

I’d presume not as it’s showing eagerness to pay and hopefully good money management, but on the other hand - financial institutions won’t make as much out of you, as I’ve saved way over one hundred pounds in interest by paying off early?

I don't think it makes any difference to be honest.

If it did, those of us who pay our credit card balances off in full each month would presumably have issues obtaining credit elsewhere which doesn't appear to be the case.

msallen

It shouldn't do no. However a 6 month loan is likely a sub-prime one is it? (as regular loans don't tend to be for any less than a year) That will probably do more harm to your credit worthiness.

[Deleted User]

There's no score or rating to be affected.

The account will show as settled on your file.

Ben8282

No.
But the very existence of such a short term loan may scream PAY DAY LOAN and put lenders off.

MEM62

It will have no impact on your credit rating and it will not 'scream payday loan'.

seatbeltnoob

hmm. I was thinking of getting an omega seamaster professional on a 6 month loan as it was interest free. (longer one attracts interest). I have to rethink that.l