Who Provides For You?

Monica has a BIG misunderstanding about keeping a car loan vs. paying it off.

QUESTION: Monica has a car payment and owes $1,500 on the auto loan. She is about to come into some money and wonders if she should pay the vehicle off or put the money in an account to build her credit so she can buy a home.

ANSWER: Don’t fall into the myth that you should go deeply in debt to have a big FICO score and be able to borrow even more. Pay your car loan off and don’t lean on credit as your provider. You are your provider. Once you don’t have any payments, you’ll have some money. You’ve already qualified yourself to buy a house because you’ve paid your rent on time for a while.