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Does a car loan impact your credit utilization ratio?

I want to get a car loan, but I'm worried about my credit score. How does a car loan impact my credit utilization ratio, or my credit score in general?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Good question! I’m happy to say that you do not need to worry about your credit utilization ratio as a result of a
car loan
. Credit utilization is the measurement of your total credit used compared to the overall amount offered to you, but this only applies to revolving credit, such as credit cards.
Knowing your credit utilization ratio is important to maintain a handle on your revolving credit debt, however, as well as keep your credit score up. To that effect, financial experts agree that your ratio should never go beyond 30% to keep your credit score at an acceptable level.
If you’re deciding to get a car loan, one thing you should keep an eye on is your car insurance. To easily get the best deal on the coverage you need, check out the
Jerry
 app—we’ll get you personalized quotes from dozens of reputable insurers in the industry and get the coverage you require.
Best of luck with the loan!
MORE:
New car insurance: What coverage do you need when buying a new car?
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