Reply
New Visitor
Posts: 4
Registered: ‎01-23-2010
0

Does a car loan help with credit score?

I have no debt at all.  I'm trying to improve my credit score.  I'm wondering if a car loan would help in the 4-6 month time frame to bring my score up?
Frequent Contributor
Posts: 268
Registered: ‎06-26-2009
0

Re: Does a car loan help with credit score?

In my experience.... little to none at all. Last year I had no open TL's other than a student loan and tons of baddies.

 

1. Traditional lenders wouldnt finance anything -- even with 3K down... including a 6K used car which would have been a 50% DP.

 

2. I went to a subprime lender- CNAC ( JDByrider ).... all 3 scores jumped 10-15 points... and even with a year of on time payments I never saw another jump until I added a major card and saw about a 15-20 point jump on EQ & TU.

 

Other people I have seen with auto loans dont seem to be getting any scoring help.. or anything like what happens with credit cards. I think thats the main reason why Auto lenders use an Auto Enhanced Fico because a regular fico score tends to be more biased towards credit cards and not auto loans.

 

Now if you have a clean history... you might have better results.

EQ- 647, EX- 641, TU- 644
Sept `13 - ZERO Debt, 100% Liquid, AND a climbing credit score. Eat your heart out Dave Ramsey!
Regular Contributor
Posts: 237
Registered: ‎08-02-2009
0

Re: Does a car loan help with credit score?

For the timeframe of 4-6 months, I believe an auto loan will hurt your score.  When I first received my loan my score had dropped 30 points (keep in mind my first auto loan).  It took about a year to break even and start gaining ground.  What helps is that if you have a solid car loan history, it looks good when you purchase another car.

EQ (11/16/2007): 573

Starting Score (1/1/2010): EQ: 712 -- TU: 726
Current Score: EQ: 748 (12/22/11) -- TU: 726 (1/7/10) -- TU04: 701 (1/27/10) -- EX: 747 (1/27/10) (LO)
Goal Score: EQ: 760


Take the FICO Fitness Challenge
Senior Contributor
Posts: 4,923
Registered: ‎04-19-2009
0

Re: Does a car loan help with credit score?

It can help, but it will most likely hurt in the < 6 month time period. Things will start to improve at 6 months and more at one year. It can be hard to get started and a secured loan like an auto loan is a good way to do it.
Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.