Frequent Contributor
Posts: 298
Registered: ‎07-25-2007

Should I Add a Car Loan?

With a credit history of only one year, I currently have 4 credit cards (4 "revolving accounts") and one student loan (an installment loan.) While I have recently opened four new accounts, only one of them has started reporting to the credit bureaus. Before this my scores were: TU 719, EQ 738, EX 735. After one new account began reporting my scores are now: TU 706, EQ 718, EX 736. I expect them to fall even more once the other three accounts begin reporting.

We have been planning the purchase of a new car for quite some time now, and we may or may not purchase in the next several days. However, I just had an idea that may or may not work. Since my Dad is purchasing this car to possibly transfer ownership to in 1-2 years, I was wondering how it would affect my credit if I were to take on the loan myself and have him as a co-signer. He would still be making all of the payments, but my name would be listed on the car loan.

Is this a good idea? How would it affect my credit score in the short term and long term/

Starting Score: EQ 773, TU 766
Current Score: EX 794, EQ 787, TU 776
Goal Score: 800

Take the FICO Fitness Challenge
Moderator Emeritus
Posts: 6,182
Registered: ‎03-29-2007

Re: Should I Add a Car Loan?

I would do it. Adding a car loan contributes to your mix of credit which will only increase your scores over the long term.

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+