Will an auto loan help me rebuild my credit?

If you make timely payments, an auto loan will help you build your credit if the lender reports your payments to one or more of the three major credit bureaus (Experian, Equifax, and TransUnion).

Some auto lenders, often called “Buy Here Pay Here” lenders, may not report your loan at all. Some of these dealers may market themselves as a way to rebuild your credit, but you don’t get this benefit if they do not report your loan to a credit reporting bureau. If you are considering taking out a loan with a Buy Here Pay Here dealer, make sure you get a promise in writing that they will report your on-time payments.

Remember that taking out an auto loan will only help rebuild your credit if you make your payments on time.

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