Your overall credit score is made up of several different sections, your payment history, credit utilization, credit mix, length of credit history, and amount of new credit. The goal is to mix up your credit with different types of loans, so you can increase your credit history and subsequently your credit score.
Having a car loan on your report can help improve your overall credit report. If you make payments on time it shows you’re less of a risk to loan officers and banks.
When buying a new car, there are three main factors that will determine your monthly payments. First is how much money you put down, then how long of a term you decide upon and the most important factor is your credit score.
Is your credit score good enough to get the best rate? If it isn’t we can help you. Credit Restorations of Texas can help you improve your score so that you can get the best rate on your car loan.
How does paying my car loan affect my credit score?
Paying off your loan early can save you money and free up some of your monthly cash flow. Car loans with timely payments show your ability to pay off a large debt. They also give you valuable points toward credit mix, payment history, and length of credit history. But you also have to keep in mind that when you pay off a car loan, you close the account. Open and active accounts create better credit history than closed accounts.
Contact a Texas Credit Repair Expert
Our goal is to get you a better credit score so that you can obtain a car loan. We will work with you on devising an action plan for things you can do to maximize your credit profile. Our strategies are proven to help improve your credit. Contact us today to schedule a consultation (210) 248-9061.