As a follow up for Should I finance a used car or pay cash? Will taking a loan improve a credit score? Does it matter how long it takes to pay off the loan? I wonder if taking a loan and paying it off in a month will give a boost to a credit score

  • 1
    What's the goal? Why do you need to boost your credit score?
    – littleadv
    Commented Oct 28, 2013 at 18:01
  • isn't it a good thing to have? Maybe one day i'll have to take a greater loan that i can't pay off right away, like a mortgage.
    – Vitalik
    Commented Oct 28, 2013 at 18:04
  • 2
    I'd disagree, but its your money...
    – littleadv
    Commented Oct 28, 2013 at 18:06
  • i am not following. Disagree with what? I am just asking if taking a loan and paying it off right away will have any effect on a credit score. This is the article that made me thinking: nerdwallet.com/blog/2013/improve-credit-score-apply-credit-card ("consider taking out a loan instead of buying it outright")
    – Vitalik
    Commented Oct 28, 2013 at 18:07
  • 3
    Its just a number. Its only good if you use it for something. If you get the same for free - why pay for it? If you can't - then getting yet another loan won't help you. But we're straying off topic, lets leave it as it is, its your money and you do whatever you feel right.
    – littleadv
    Commented Oct 28, 2013 at 18:17

1 Answer 1


Imagine that your normal mode of using credit gets you a score of X. As time goes by your score trends upward if the positive items (length of credit) outweigh your negative items. But there are no big increases or decrease in your score.

Then you make a one time change to how you use credit. If this is a event that helps your score, there will be a increase in your score. If it is bad thing your score will drop. But if you go back to your standard method of operating your score will drift back to the previous range.

Getting a car loan for a few months to get a bump in your credit score, will not sustain your score at the new level indefinitely. Overtime the impact will lessen, and the score will return your your normal range.

Spending money on the loan just to buy a temporary higher credit score is throwing away money.

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