Should I get a Car Loan to build credit or Pay in full

4 Replies

Greetings!  I plan to buy apx $9,000 car... Should I buy the car using cash  or get it financed which will help me improve my credit? .... my current score is 653. Id like to position myself to get some rental properties within the next year.

Also, can I begin now, to invest in Real Estate with that $9k instead?

I would say to buy it in full.  

Remember if you get a car loan that will count as monthly debt when you go apply for a mortgage which will effect your dti.

There are other ways to build your credit besides a car loan.

It's as simple as paying your bills on time and charging a thing or two on a credit card.

Have you pulled your free credit report at annualcredit report?

Go through all the negatives and see if there is possibly something that is affecting your score.

A big chunk of your score is rated by paying bills on time, keeping credit utilization under 10% and not having judgements applying to a bunch of different credit cards at the same time or debts in collection.  When I applied for my car loan they did 9 hard inquiries on my credit and my score dropped 20 points.  

Yes I have gotten my credit report from the three major ... Thank you for your response.

I was doing a lil research on credit karma and it said that various types of credit will help boost your score... credit cards are one form... car loans are considered installment pay,emts and there was a third kind that I dont remember.... the only bills I Have are cell phone and car insurance and they do not report to the credit bureaus  

Buy a two thousand dollar car and use the other 7 k to buy a house! Having the car loan can hurt your debt/income and that's what killed me when I went to get my loan. If you have enough income 650 might be a high enough score to get a home loan!

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