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Should I Add a Car Loan?

Frequent Contributor

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 (2/25/2017): EX 813, EQ 823, TU 818
Goal Score: 800

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Message 1 of 2
Moderator Emeritus

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.
Message 2 of 2