I am buying a 17K car and i have enough to pay it off. My credit score is around 780 and I can get a loan for around 1.5%. If I take the loan and pay it off, will that help improve my credit score to get to the 800 mark? I have only had credit card balances which I pay off every month and never had a mortgage or credit card payment. Thanks!
Per FICO, I doubt that adding a car note would increase your FICO to 800. Conversely, I would bet a drop in FICO due to the new account with much of the damage disappearing within a few months-year.
There are several posters on here who hit 800 with no loans and only CCs. I hit 777 on my EQ FICO with only CCs, though I had a closed loan reporting at the time come think of it.
Are your CCs reporting $0?
Thanks for the reply. The last I checked my my full credit score i was zeroed out. My basic credit score has remained dormant these last 2 years according to the backend of my credit union portal. I want to buy a condo within the next few years and I was thinking that after the car was paid off, It would help my credit score go up. I have never had a installment payment before. So you dont think it is worth getting the loan?
I think you'd lose points if you got a loan. Maybe as it aged years down the road it'll be helping by then, but not 2, IMO. Now I'd get it if I needed it, but I wouldn't do it for FICO.
For max results on revolving credit, don't let all of your CCs report $0. Let one report a small balance. Oddly enough, all $0 balances can hurt your FICO. Ideally you'd want one to report a balance of under 9% of the CL and the rest at $0.
Thanks for the advice. I was only going to get the loan for the FICO score. I am shocked that keeping a balance on a credit card actually helps your credit score. I will have to look into it.