An auto loan will not raise your fico credit score by making timely payments. if you have a car and need a car loan, the only way that the line of credit could possibly help your credit score is if something happens to cause it to be reported as closed, delinquent or in default. this data point will lead to an overall drop in your overall fico-based credit score.
does your credit score go up every time you make a car payment?
when you make a car payment, it is removed from your credit card balance and is reflected as a score change to the company that handles your credit.
if you've paid off your car in full (and haven't made any new purchases on the same card), then you should expect that the credit score would stay stable or even go down slightly. if you're still making payments on your vehicle, any pay-out penalty will also be noted as a “positive” for credit metrics, but if penalty's are less than 3% of total owed then this may not affect metric by much at all. however, always check with creditor first to determine eligibility!
how long does it take to build credit with a car loan?
“this is not the kind of question one can answer easily with an absolute number, because so many other factors affect outcomes. it could take as little as a few months for first-time borrowers and up to 18 months for those who already have loans and should know better.”
