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How many points does a car loan increase your credit by?
I have a credit score of 770, but I want to push it up into the next tier. Will a car loan do it? How many points will a car loan improve my credit by?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Good question! Building your credit score above 780 puts you into the superprime range, which means you can get the best rates possible. However, if you want to get there with a car loan, it’s all about patience.
A
car loan
will actually lower your score by about five to 10 points at first. This is due to the hard inquiry or credit pull when you take out the loan. But you shouldn’t worry; this is only temporary.As you continue to pay off your car loan, you should see your credit score rise, as long as you make the payments on time. In the meantime, you can continue to pay off other debt, specifically credit cards, to make sure that your credit score continues to go up.
To free up some cash to pay down your debt, always look at your car insurance yearly or bi-annually. To review your policy easily, check out the
Jerry
app. By doing so, we’ll get you the best rate for the coverage you require.Best of luck with your credit score!
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- Gregory R.
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