How Fast Will a Car Loan Raise My Credit Score? PLUS The Secret to Rate Shopping

So, I just read this article about how car loans can help raise your credit score, and I have to say, it’s pretty interesting stuff. Basically, if you can get a car loan and make timely payments, it shows lenders that you’re responsible and trustworthy when it comes to repaying debt. And the faster you pay off the loan, the more it boosts your score!

But here’s the thing: you need to be careful about rate shopping. That means applying for multiple loans to compare rates and find the best deal, but doing it too frequently can actually hurt your credit score. That’s because multiple loan inquiries can make you look like a high-risk borrower who’s desperate for cash.

So, what should you do? First, do your research ahead of time and try to narrow down your options before applying. Once you’re ready to start rate shopping, try to keep all your applications within a two-week period. That way, they’ll only count as a single inquiry and won’t drag down your score.

Now, I haven’t needed a car loan myself (I’m still rockin’ my trusty beater), but I have been in the market for a new credit card before. And let me tell you, it’s a similar situation. You want to find the best deal and the highest rewards, but you don’t want to hurt your score in the process. So, my advice? Take your time, do your homework, and be strategic about your applications.

Overall, I think this article is really important because your credit score can have a big impact on your financial future. Whether you’re buying a car or applying for a mortgage, lenders will always look at your score to determine your risk level. So, if you can boost your score by making smart moves like getting a car loan, it’s definitely something to consider. But remember to always be cautious when shopping around for rates, and don’t overdo it!