Buying a Car? Here's The Impact to Your Credit

When you're driving away from the dealership in your brand-new car, you're probably not asking yourself, "Does buying a car help your credit score?"

Top Ways Buying a Car Affects Your Credit

Hard Inquiry

When you apply for a car loan, your account goes through a hard inquiry. Unfortunately, a hard inquiry will lead to an automatic lowering of a few points of your credit score.

Acquiring Debt

Once you buy a car and acquire a loan for it, your credit report will reflect the additional debt that will impact your credit score That is because you haven’t made any payments yet.  

Making Timely Payments

Payment history is one of the most significant factors that affect your credit score. By making timely payments, you can enhance your credit score. 

Managing Your Credit Mix

Your ability to manage a mix of various types of credits proves that you are creditworthy and will give your credit score a positive boost.  Adding an installment credit in the form of a car loan will lead to a positive impact on your credit score. 

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