will build your credit score, but it will take time and patience. Initially, a car loan actually will lower your credit score. When you take out a car loan, most lenders do a hard inquiry on your credit report, which will cause a drop of five to 10 points. It will also lower the average age of your credit and create a new credit account.
In total, this may drop your credit score by 20 to 30 points initially. However, continuous on-time payments will cause your credit score to rise. After about a year or two, you should notice your score going up.
If you decide to buy a new car, don’t forget to budget for car insurance. The loan will require full coverage car insurance, so shopping around can save you the most money. Use the
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