Clients of mine are currently trying to build their credit and positioning themselves to buy a home in the future. With this said, they have questions about the best way to search, finance, and purchase a car so I’ve done some research for them that I thought would be helpful.
In a previous post, we looked at basic ways to boost your credit score. One of the items we listed was making regular car payments. In fact, car payments can be one of the most effective ways to boost your credit score.
Now, it’s true that any sort of regular payment on debt will help out your credit score, but what makes car payments so good at this? Simple — car payments are usually several hundred dollars. It’s not like when you get a payment plan on a $1000 appliance; those might only cost you $50 – $75 a month. This is a long-term, significant payment. In fact, it’s probably the second-most significant payment you’ll regularly have to deal with until you send kids to college.
Regular car payments demonstrate stability and an ability to handle a pretty significant sum each month. A good six months of regular car payments can make an impact on your credit score. If it’s something you can afford and something you need, buying a new car can do quite a bit for rebuilding or raising your credit score.
The views published here are the opinions of the writer and are not a substitute for legal counsel.
Israel Gonzalez
Real Estate Broker-Hollister CA
831-636-8858
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