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Does a car loan help your credit?

Will my credit improve if I make car loan payments? After several rounds of IVF, my partner and I are expecting our first child. I want to buy a home in a more family-friendly neighborhood so our child can make friends. My current credit score isn’t bad but could be better, and I know I need good credit to qualify for a mortgage.

avatar
Phoebe Mah · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations on the baby! Yes, making car loan payments can help improve
credit
! Here is a brief breakdown of how credit scores work.
Your credit report consists of various accounts and tracks how long you’ve made payments toward each account and if those payments were on time. One way to build your credit history is by making regular on-time payments for your car loan. By doing so, lenders can see how you are managing your money.
Remember that to show lenders you are a reliable borrower, you will need to build a long-term history of making consistent payments.
Since you are interested in buying a new home, check out how you can save money on other expenses—like car insurance—with
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