Does a Car Loan Build My Credit?
Consumers looking to purchase a car often want to know how it's going to affect their credit. Does a car loan build credit or does it cause it to drop?
The Answer is Yes it builds your credit.
A car loan in and of itself does not build credit. once you take on a car loan, your credit might actually experience an initial decrease. When you first apply for a loan, your application typically gets sent out to a few lenders. Whenever a lender reviews your credit report, a new inquiry will be added to your account. An inquiry is a record showing that someone has viewed your credit report.
Any inquiries that are made for an auto loan will appear on your report; however, most credit scoring systems will combine multiple inquiries so that they only count as one. Some of the newer credit scoring systems don't count auto loan inquiries at all.
When you buy your vehicle and the auto loan becomes active, the debt will be added to your report. This is when you might lose a few points on your score. Once you prove that you can manage your new debt by making on-time payments, you should more than makeup for those lost points.
If you plan on using a car loan to build credit, it's important to understand that the loan itself will not help build your credit report or score. In fact, the loan will likely lower your credit score at first. However, if you establish a solid payment history by keeping up with your monthly payments, your auto loan should help to improve your credit score in the long run. Come in and let us show you how to works.
WHAT DO I NEED FOR IN-HOUSE FINANCING?
We do our best to help you build or rebuild your credit. That’s why our in-house financing process is easy and clear. If you’re a resident of Hawaii even outer the islands with a stable income, references, a valid driver's license you’re guaranteed approval!
WILL SKY AUTO HAWAII REPORT MY PAYMENT INFORMATION TO ANY OF THE U.S. CREDIT AGENCIES?
Yes. We make sure that you’re rewarded for paying on time, so we report your information to Equifax and TransUnion. Your credit score will go up monthly if you make payments on time. With a better credit score, you might get a lower interest rate on your next car from Sky Auto Hawaii
Contact us today for a no-obligation consultation to get you on the roads again.
