 TITLE: Can You Pay More on Your Car Payment? CONTENT: How Paying More on Your Car Payment Affects Your Credit\n-------------------------------------------------------\nPaying more on your car loan affects your credit score—and not necessarily in a positive way. Here's what you need to know.\nIf you make an extra car loan payment once or twice, it probably won't impact your credit score at all. However, if you consistently make extra payments and pay off your car loan early, it can actually _hurt_ your credit score—especially if you're just starting to build credit, don't have many credit accounts or are trying to improve your credit score.\nOnce your loan is paid off, the account will be closed. Although closed accounts may show you successfully managed credit in the past, open credit accounts have a greater impact on your credit score because they show lenders how well you're managing credit in the present. Your credit score also takes into account how long you have been using credit, so if your auto loan is your oldest credit account, closing it can hurt your credit score.\nClosing your auto loan may also reduce your credit mix—that is, how many different types of credit you have. Car loans, mortgages and student loans are installment loans, meaning you borrow a fixed amount and pay it back in monthly installments. Most credit cards are revolving credit, meaning your payments are based on how much of your available credit you use. Having a diverse mix of both installment and revolving credit can help to boost your credit score. If your car loan is your only installment loan, it's better to keep it open than to close it early. Learn more about what affects your credit score.\nFinally, paying off your car loan could hurt your credit score if all of your other credit accounts have high balances. That's because credit utilization ratio (how much of your available credit you actually use) is a factor in your credit score. Find out more about how paying off a car loan early can hurt your credit score. END