Does Applying for an Auto Loan Hurt My Credit Score?

August 24, 2010

There is no definitive answer to this question regarding an auto loan application. There are many factors that go into a credit score and the formula is kept a closely guarded secret. In most cases, your credit score will take a slight hit when you first take out an auto loan. Any new credit lines will tend to knock your score down for a few months. In some cases an auto loan can actually increase your score as the credit scoring agencies like to see variety in the types of credit a person has. In all cases, the most important thing you can do is make your payments on time. If you fail to do this, your score will definitely go down.

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