Quote:
Originally Posted by Halon
Are you under the impression that a loan hurts your credit rating? Unless you plan on being late on your payments constantly, an auto loan will help you BUILD credit if you are responsible and make your payments on time. Simple really...
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Correct. As long as you make your payments on time and you haven't over-extended yourself a loan on your credit report will do nothing but help. Think of your credit as eBay's feedback rating system...every time you do any sort of financial transaction that's tied to your SS# your credit score can go up or down. Make payments on time and live within your means and it'll go up, skip payments, take out more loans than you can afford, etc. and it will go down.
Both my wife and I have credit scores in the high 790's which is very rare for someone in their mid/late 20's. We've each had a few car loans and credit cards, then the typical apartment leases, nothing fancy, but we've both been very diligent about living within our means and making payments on-time our entire lives. I got into a little credit card debt my sophomore year of college but I always paid my bill on time and at the very least paid double the minimum payment required.