How Car Loans Affect Your Credit Score

Car loans are a great way for everyday consumers to get the new and used vehicles that they need at a price they can afford. Find out how applying for, getting and paying for your car loan can affect your credit score.

How applying for a car loan affects your credit score

New credit score policies are taking a toll on consumers that like to get multiple loan quotes. Every time you apply for a car loan, it affects your credit score. To make sure that your car loan is a positive influence on your credit, do your research first and only apply to your top one or two loan companies.

How getting a car loan affects your credit score

Getting a car loan is always a good feeling, but keep the experience positive by managing your loan intelligently. Bear in mind that having any kind of credit line gives you an opportunity to improve your credit score, but taking out more loans than you can handle reflects poorly on your credit rating, so get what you need the first time around.

How car loan payments affect your credit score

Missed car loan payments reflect on your credit score for months or even years, especially if you miss more than one payment or are significantly behind. On the other hand, if you make your car loan payment on time every time then these small, secured loans are a great way to boost your credit score. To ensure that your payment is prompt every month, consider enrolling in an automatic payment program.

Use your car loan to help, not hurt, your credit score by following a few simple rules for applying for, receiving and paying off your car loan.