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How bad will it hurt me adding a car loan

Super Contributor

How bad will it hurt me adding a car loan

I have paid off both installment loans I had on my CR. I took out a car loan for $6000 to be paid in 48 months. I am going to get the check tomorrow morning with first payment due on Feb 7th.There is no hit with hard Inq as the loan was approved in Dec.
 
How bad this will hurt my score in the short term and how long will help by the time my scores comes back. My revolving util is less than 1%.  As every says need a mix of loans that is I have decided to add this loan. I could pay it off in 2-3 months or I can leave it on my CR and make monthly payments.
 
Any suggestions?.
Message 1 of 5
4 REPLIES
Moderator Emeritus

Re: How bad will it hurt me adding a car loan

To maximize FICO - get the balance paid down under 65% as quick as you can.
 
Should see it start helping in a few months- 
 
But you could just flip a coin Smiley Happy

concorduser wrote:
I have paid off both installment loans I had on my CR. I took out a car loan for $6000 to be paid in 48 months. I am going to get the check tomorrow morning with first payment due on Feb 7th.There is no hit with hard Inq as the loan was approved in Dec.
 
How bad this will hurt my score in the short term and how long will help by the time my scores comes back. My revolving util is less than 1%.  As every says need a mix of loans that is I have decided to add this loan. I could pay it off in 2-3 months or I can leave it on my CR and make monthly payments.
 
Any suggestions?.



Message 2 of 5
Super Contributor

Re: How bad will it hurt me adding a car loan

Thanks Timothy. I can pay down the loan to under 65%. What about the rest of the loan. How many months should I keep it. I was told keeping 24 months is better for an installment loan. Is it true? I'll also add a mortgage soon around march. I am already approved for that Mortgage Loan.
 
So now that I have car loan as Installment Loan and Real Estate Loan ( Once I  close the loan)  and I have revolving store cards and revolving Visa/MC. Am I all set for the best fico score configuration both in the short term and long term?
 
What else should I do to boost the scores? Or is this best path for fico future. Any thing else I should look into maintaining the best scores?
Message 3 of 5
Senior Contributor

Re: How bad will it hurt me adding a car loan



concorduser wrote:
Thanks Timothy. I can pay down the loan to under 65%. What about the rest of the loan. How many months should I keep it. I was told keeping 24 months is better for an installment loan. Is it true? I'll also add a mortgage soon around march. I am already approved for that Mortgage Loan.
So now that I have car loan as Installment Loan and Real Estate Loan ( Once I close the loan) and I have revolving store cards and revolving Visa/MC. Am I all set for the best fico score configuration both in the short term and long term?
What else should I do to boost the scores? Or is this best path for fico future. Any thing else I should look into maintaining the best scores?



Live as long as possible.
Message 4 of 5
Super Contributor

Re: How bad will it hurt me adding a car loan

Yep, that is my idea to live as long as possible. That is why I started putting 40% of my income into my retirment plans. I dont want to out live my savings. My kids are growing up fast. I need to save for them also I need to keepy CR clean if I need to co-sign for them or help them. I dont my kids think I am financial failure. Thanks to you all in this forum for bringing the best out of me in 2007.
Message 5 of 5