How Long Does a Paid Auto Loan Remain on My Credit Report?

How Long Does an Auto Loan Remain on Your Credit Report?

A repaid auto loan can remain on your credit report for up to 10 years if you weren't delinquent (behind on payments) when you paid off the loan. The account should show a $0 balance and will be closed. It may also say something like paid and closed, or paid/never late.

The account could also stay for up to 10 years if you missed payments and then brought the loan current. However, the late payments will be removed from the account's history seven years after they occurred. If you missed several payments in a row, the entire series gets removed seven years after the initial late payment in that series.

When you fall behind on payments and never bring the auto loan current, the entire loan falls off your credit report seven years after the initial late payment in that series. The date of the initial late payments is also called the original delinquency date. Related negative marks and accounts, such as repossessions, voluntary surrenders and collection accounts, will also be removed seven years after the original delinquency date.

Learn more: How Long Does It Take for Information to Come Off Your Credit Reports?

How Does a Paid Auto Loan Impact Your Credit?

A paid auto loan can help or hurt your credit scores in several ways. The exact impact will depend on what else is in your credit report and how long it's been since you paid off the loan.

• Payment history: The account's payment history could have the largest effect on your scores. You'll receive the most benefit if you never missed a payment and kept the account in good standing. Late payments will continue to hurt your scores after the account is closed, but their impact diminishes over time.
• Account age: The paid auto loan's age will also continue to affect your credit scores until the account falls off your report. The age of your oldest and newest credit accounts, and average age of your accounts, could impact your scores. The auto loan might help you over time as having older accounts tends to be better for your credit.
• Loan payoff: Paying off the loan early won't necessarily cause additional benefit or harm in the long run. However, in general, paying off a loan can lead to a small score drop at first. In part, this is because an installment loan with a small balance may be better for your credit than a closed loan. Additionally, if the auto loan was your only installment loan, paying it off could decrease your credit mix. However, these dips can often be minor in the grand scheme of your credit history, and it may be better to free up the funds for paying down other debt, saving or investing.

Learn more: What Affects Your Credit Scores?

How to Dispute Inaccurate Auto Loan Information

Regularly checking your credit reports is a good idea and can help ensure your auto loan information that appears there is correct. You have the right to dispute the items on your credit report, which could help you correct errors that may be affecting your credit scores.

For example, an auto loan might incorrectly show late payments or the account could be marked as open after you pay off the loan. Keep in mind that you may need to wait several weeks for the lender to report your loan as paid off to the credit bureaus after you make your last payment.

If you notice an error, you can file a dispute with the auto lender, or with each of the credit bureaus by phone, mail or online. A bureau generally has 30 days to investigate the account. It will then verify the information as correct or update the account with correct information.

Learn more: How to Dispute Credit Report Information

Monitor Your Credit for Changes

Keeping an eye on your credit reports and scores can be important. You can get your credit report and FICO^® Score^☉ for free from Experian and receive daily updates and important alerts about changes. Free Experian members can also look for new credit card and loan offers based on their credit, and they can get auto insurance quotes from top insurance companies to find out if switching insurers will save them money.