Can a car loan improve your credit?

I’m trying to find ways to improve my credit score. Does taking out a car loan help it?

Answer
Improving your credit will give you access to many benefits in the long run, but it’s a slow process. Taking out a car loan won’t cause an immediate increase in your credit score: in fact, it will do the opposite. This is because you have just taken on a large amount of debt.
However, as you continue to pay the loan off, you will build credit. It’s important to pay on time each month to reap maximum benefits.
While you’re playing the long game with your credit score, consider some ways you can save money in the short run. Jerry makes it easy to find savings on your car insurance rates by helping you compare competitive quotes from up to 50 top providers.
Lauren Smith
Answered on Nov 10, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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