How fast will a car loan raise my credit score reddit?

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When it comes to improving your credit score, taking out a car loan can have a positive impact. However, the speed at which your credit score will increase as a result of a car loan can vary depending on several factors. In this article, we will explore how fast a car loan can raise your credit score on Reddit and provide some insights into the process.

The Impact of Payment History

One of the most significant factors that influence your credit score is your payment history. Making timely payments on your car loan can help boost your credit score over time. Each on-time payment demonstrates your ability to manage your debt responsibly, which is viewed positively by credit scoring models.

Tip: To maximize the impact on your credit score, make sure to pay your car loan installments on time every month.

Length of Credit History

Another important factor in determining your credit score is the length of your credit history. If you are taking out a car loan, it is likely that you are establishing a new credit account. While this can initially lower your credit score due to the lack of credit history, it can also provide an opportunity to build a positive credit history over time.

Tip: To mitigate the impact of a new credit account, consider keeping your other credit accounts open and in good standing. This will help maintain a longer credit history and balance out the new account.

Credit Utilization Ratio

The credit utilization ratio refers to the amount of credit you are currently using compared to your total available credit. Taking out a car loan can increase your total available credit, which can lower your credit utilization ratio if you maintain low balances on other credit accounts. A lower credit utilization ratio is generally viewed positively by credit scoring models.

Tip: Aim to keep your credit utilization ratio below 30% to optimize your credit score. Paying down other debts can help achieve this goal.

Types of Credit

Credit scoring models also consider the types of credit you have in your credit history. Having a mix of different types of credit, such as installment loans (like car loans) and revolving credit (like credit cards), can positively impact your credit score. By adding a car loan to your credit mix, you can diversify your credit profile and potentially improve your credit score.

Tip: If you already have a good mix of credit accounts, adding a car loan may have a smaller impact on your credit score in terms of credit mix.


While taking out a car loan can have a positive impact on your credit score over time, the speed at which it raises your credit score can vary. Factors such as payment history, length of credit history, credit utilization ratio, and credit mix all play a role in determining how fast your credit score will increase. It is important to make timely payments, maintain a low credit utilization ratio, and have a diverse credit mix to maximize the benefits of a car loan on your credit score.


– Experian:
– Equifax:
– TransUnion: