Does paying off debt too early negatively affect credit?

Submitted by ingrid_n_flores on Thu, 08/19/2010 - 19:42
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Does anyone know if paying a loan off within three months of opeining it negatively affects your credit?

I wouldn't call it a negative effect but it shortens your credit history.

Thu, 08/19/2010 - 22:00 Permalink

Hi Ingrid,

Welcome to this community :)

I agree with cinnamngrl. As you are paying off the loan within 3 months the credit history shortens. However, there will be no negative effect on your credit as such.

Another thing is that the lender can charge you penalty fee for paying off the loan much earlier than the stipulated time. This varies according to lenders. So before making the payments I think you should talk to the lender.

Hope this helps.

Regards,

Aaron

Fri, 08/20/2010 - 06:28 Permalink