Does getting a car loan improve my credit score over time?

I already have plenty of credit cards, but I've noticed my credit score is stagnating even when I pay off all my credit cards in full. Will getting a car loan improve my loan over time?

A car loan can certainly boost your score over time, but only if you can make on-time payments each month. If a car loan is a financial burden for you, resist the urge to get a car loan, or at the very least, consider an affordably-priced vehicle with lower payments.
Once you get a car loan, your credit score may temporarily drop five to 10 points as a result of a hard inquiry on your credit report. Your score should start to increase once you start paying off your loan and the hard inquiry falls off your credit report.
To help pay off any debt you may have, make sure you’re saving as much money as possible on car insurance. Download the Jerry app to compare quotes from top insurers and get the best rates for your car insurance needs.
Eric Schad
Answered on Nov 17, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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