 TITLE: Will Paying Off a Loan Improve Credit? CONTENT: What Happens to Your Credit If You Pay Off a Loan Early?\n--------------------------------------------------------\nPaying off installment debt like personal loans and car loans won't necessarily help your credit scores. If you get rid of these loans early, the impact on credit will be slightly different than if you make a large payment to reduce your credit card balance, for instance. That's because installment loans will appear as \"closed\" on your credit report when they're paid off, and open accounts with positive payment history have a stronger positive impact on your credit score than closed accounts.\nYou may consider making payments as agreed throughout the loan term (rather than contributing an early lump-sum payment) if your loan's interest rates are low or 0%, if you don't have emergency savings, or if there are only a few months left on the term and you can make use of the resulting positive effect on your credit. END