I have a $30,000 auto loan at a low interest rate. If I pay half of it, will this benefit or hurt my credit score?

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I was thinking of paying 1/2 and refinancing at a slightly lower rate, which would lower my payment by $300. Will it be affecting my debt-to-income ratio?

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@WalletHub • 06/19/17 This answer was first published on 06/19/17. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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While paying off half of your auto loan will certainly benefit your credit score and your ability to get a line of credit, it doesn’t have as large of an impact on your credit score as you might expect. This is because credit reporting agencies take payment history, credit utilization, age of credit history and credit card applications into account, in addition to the amount of debt owed. Still, paying off a loan at a better rate is good for your financial well-being. By signing up for WalletHub, you can identify your credit strengths and weaknesses. You can see them on your Credit Analysis page here: https://wallethub.com/home/credit-analysis.

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