Can a car loan improve my credit?

It can! A car loan has the potential to help – or hurt – one’s credit. Auto loans provide a new opportunity to show lenders your ability to consistently make payments in full and on time, which can boost your credit score. On the flip side, falling behind on a new auto loan can take a bite out of your credit score. Another consideration is that lenders like to look at the total amount of your monthly bills. If your new auto loan payment is less that your old loan payment, you might see a boost in your credit score. Similarly, if your new auto loan payment is larger than your old loan payment, your credit score might take a hit.