Loan due to end

Scott1875

Morning folks

I have a 5 year bank loan due to end in December. This is one of my longest credit accounts. Im wondering what kind of impact the loan finishing will have on my credit report? The loan will have been paid back with no late payments which you'd think would be seen as a positive but in turn, with it finishing, it would lower the average age of my open accounts a fair bit. Would this negate the positive aspect or am i over thinking things a bit? I guess the main thing is it will show i have managed the loan well...

Many thanks

nick74

Scott1875 wrote: »

am i over thinking things a bit? I guess the main thing is it will show i have managed the loan well...

Yes, and yes.

Scott1875

Haha thanks!

nick74

I think 'average age of accounts' is one of those factors which CRAs go on about, but which in practice matters very little to most potential lenders.

Its not like you can do anything to change the situation anyway, once the loan is settled its settled.

Ben8282

Scott1875 wrote: »

Morning folks

I have a 5 year bank loan due to end in December. This is one of my longest credit accounts. Im wondering what kind of impact the loan finishing will have on my credit report? The loan will have been paid back with no late payments which you'd think would be seen as a positive but in turn, with it finishing, it would lower the average age of my open accounts a fair bit. Would this negate the positive aspect or am i over thinking things a bit? I guess the main thing is it will show i have managed the loan well...

Many thanks

The loan will continue to show on your credit files for a further 6 years. In terms of average account length, open accounts are not treated seperately form closed accounts and therefore the average account age will not change when the loan is settled although the age of this loan will no longer increase but remain constant at 5 years for the next 6 years until it drops off your files.
A correctly conducted repaid loan with no late payments can only be viewed positively.

jimbo26

The loan will show as settled with lots of green ticks next to the monthly repayments.

If you mean will it effect your made up score from the CRA's then yes you may see a drop in the randomly generated number, but can safely ignore this.