Building Credit with an Auto Loan

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Auto Masters

Whether you’re working on improving your credit health after a bankruptcy or just getting started as a borrower, making car payments on an auto loan is an excellent way to establish or build your credit score.
Before you take out that big home mortgage loan, business loan or finance that designer furniture set, you need to prove to lenders that you’re creditworthy.
Car loans help you do just that for the following reasons.
Auto Loans are Installment Loans
When lenders and credit reporting bureaus look at your credit history, they want to see a good mix of installment loans and revolving credit. Revolving loans include credit cards and home equity loans. Installment loans include student loans, mortgages and auto loans. In most cases, it’s not feasible (or wise) to take out a student loan, home mortgage or home equity loan simply to build your credit. It’s much easier to qualify…

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