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Advice on auto loan and credit rating

Does having an auto loan affect my credit score?

Does having an auto loan affect my credit score? I pay a little more than the amount due in time every month, would that have any impact?

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Most banks who finance automobile purchases report account activity to the three major credit bureaus: Equifax, Experian and Transunion. If you lender reports your loan, it will impact your credit score, but whether that impact is good or bad depends primarily on your payment history.

From your question, it sounds like you are making your payments in a timely manner, so this loan should have a positive impact on your credit score. Credit scoring depends on too many factors to say how much the auto loan will affect your credit. Bills.com offers a wealth of information about credit, credit scoring, and how to improve your credit score.

Paying more than the minimum each month will probably not have a significant impact on your score; the important thing is that you make at least your regular payment each month. However, it is certainly not a bad idea to pay your loan down as fast as possible, as it could save you a lot of money in interest. The amount extra you will be allowed to pay each year depends on any prepayment restrictions in your auto loan contract. Make sure to review your loan agreement and contact your lender to discuss possible prepayment of your loan.

I hope this information helps you Find. Learn. Save.

Best,

Bill

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