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Originally Posted by elsesomebody
NoSoup, I'm not sure I understand your logic for this. If I have a loan that I'm paying interest on, and I have saved up enough money to pay off the debt, and my savings interest rate is substantially lower than the loan's interest rate, I don't see any reason why I wouldn't want to pay off the debt. I have a great credit score, and would like to make it better, but I don't consider it worth paying for. Perhaps what you are trying to say is correct, but only in certain situations?
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What he's saying is that the longer you are making regular, on-time payments on a loan, the more evidence banks have that you can make regular on-time payments and the better your credit score will be. So while it might cost you now, it will be made up for when you take out a home mortagage or some other large loan where a few tenth of a percentage point in interest can mean thousands of dollars.