Is it true that taking out an auto loan is the best, fastest way to increase your credit score?
Jul, 2010 in Build Your Creditsay you pay it on time every month..
as opposed to credit cards, personal loans, etc.
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It’s also the fastest way to stay broke.
You need to decide, do you want to have good credit, or do you want to have good money?
Why is everyone going crazy worrying about their credit scores? All you need is good credit. You get that by keeping borrowing under control–well within what you can afford–and paying all bills on time.
The only good debt (in my opinion) is to purchase assets that go up in value, such as well-chosen real estate. Borrowing to buy a car is necessary for young people but after 35 or 40 it should be possible to save and pay cash for autos.
A credit card or two is handy and occasionally necessary, such as for renting a car. Pay off everything you charge each month and it won’t cost you anything.
Sure, you say, nice for old folks but not practical for younger ones. Well, I had this same philosophy at 17 and it has served me well. In those days credit scores didn’t exist or we didn’t know about them, which was probably a blessing.
well, if u are lookign to improve your credit score, you’ll need a mixture. 1 revolving acct, and an installment loan, like a car, PAID ON TIME! credit scores grudually go up though w/ time. it’s your history that establishes your credit, not so much as to what you have. if ur able to afford a car loan? then cool. get one and py it ON TIME! EVER TIME!. but if u are jst looking ot jst improve your score? then i say ur best bet is to get a personal loan, DONT USE THE MONEY! , and just py the loan back w/ the money u borrowed…..say py it off in 1-2 yrs, so that the money doesnt burn ur pockets too much. having a loan jst shows banks that they are able to invest in you, and if ur good at pying them back, then banks are MORE inclined to invest MORE into you, say????? a mortgage at a REALLY GOOD RATE
hope this helps
oh let me add too! credit cards ARE LOANS! they are revolving lines of credit, and to banks they are considered LOANS to you to use, and expect you to py back! – jst food for thought