Will an Auto Loan Help or Hurt Me?

Anonymous · ‎02-21-2018

So, I just got a new car with a Navy Federal loan a couple of weeks ago, and it isn't showing up on my reports yet.

I was just curious if my score might plummet because of it? I'm SO close to 800 now and I'm going to be bummed if buying a (much needed) new car is going to hurt me.

One of my scores is 775, and the other two might be closer to that within the next few days since I just paid off most of my debt. I only owe $2000 total that will be paid off over the next month, but the car loan is 21k.

One thing in my favor is that I have no installment loans currently, so this will be the first one showing up on my report. I heard that can help in some cases?

Thanks!

Anonymous · ‎02-21-2018

You may see a slight score drop from the new account and age of accounts factors, but going from no installment loan to having one (just maxed out utilization) probably won't hurt much. Any score drop you see will be relatively minor IMO and within 6 months time you should recover from whatever that is.

The better way to look at it though is that your near 800 scores are what allowed you to score your auto loan at no doubt the best rate possible, which is what having great credit is all about. Mission accomplished! It's fine if your scores drop a little. They will still be top tier if you were to need another loan.

SouthJamaica · ‎02-21-2018

@Anonymouswrote:
So, I just got a new car with a Navy Federal loan a couple of weeks ago, and it isn't showing up on my reports yet.

I was just curious if my score might plummet because of it? I'm SO close to 800 now and I'm going to be bummed if buying a (much needed) new car is going to hurt me.

One of my scores is 775, and the other two might be closer to that within the next few days since I just paid off most of my debt. I only owe $2000 total that will be paid off over the next month, but the car loan is 21k.

One thing in my favor is that I have no installment loans currently, so this will be the first one showing up on my report. I heard that can help in some cases?

Thanks!

IMHO your FICO 8 will gain some points from adding the loan to your 'credit mix' but lose more points by having a maxed out loan.