How long should I make loan payments before it will build my credit?
jimbob66 asked:
I recently applied for an auto loan to start building some credit. I have the money to pay it off right away, but I was waiting to start building my credit. Is there any benefit to taking months to pay it off or is just having a loan enough to build credit? Is there a good amount of months to wait to pay it off?
I recently applied for an auto loan to start building some credit. I have the money to pay it off right away, but I was waiting to start building my credit. Is there any benefit to taking months to pay it off or is just having a loan enough to build credit? Is there a good amount of months to wait to pay it off?
Go to the source to see your unique situation:
It is always best to get at least 12 months of on time pay history before paying off a loan. I know at the credit union I work we will lower peoples interest rates if they have had loans with us in the past and have maintained at least 12 months of on time pay history with us. So that will help you later to if you find a place that offers that.
It is important to build credit in American society starting at a very young age. The reason that it is increasingly important to build credit is because of the standard developmental stages American adolescents and young adults go through.
If you build credit early, it will be there to access during your starving college years, when you may need it most.