Does Buying a Car Help 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?”

Let's find out how your credit score could be impacted by signing that car loan.

Top Ways Buying a Car Affects Your Credit

Here are a few ways your credit score is affected when you decide to buy a vehicle.

A hard inquiry will lead to an automatic lowering of a few points of your credit score for a couple of months.

Hard Inquiry

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.

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.