I have paid off all of my debts.?

Question

Now I have a car loan, can I use that to re-establish my credit and raise my credit score? Does anyone know how long it will take?

Answer 1

First, I'd get a copy of your credit report and see what's on there. Make sure there is nothing else outstanding. Check all the negative reports and make sure they are correct.

If you don't owe anything, you should be able to get a car loan.

The link below is to get your free copy of your credit report. You are entitled to one copy annually. You might also want to pay the fee to get your credit score. Once you know what your report says and clean up any negative items that you can, you'll be in a better position to negotiate interest rates with a lender on an auto loan.

Good luck.

Answer 2

Listen, you don't have to have debt to have a good credit score. You don't need to buy anything or get more credit cards, that's just ridiculous. Keep paying your car loan. Everything on your credit report that you just paid off is still there. The longer you have less extended credit but are in good standing with the credit you do have, the better off you are. Don't go "do" anything to effect your credit score right now. Just keep doing well.

Answer 3

To re-establish credit it takes time like everything else. It doesn't happen overnight. Creditors want to see your are paying your debts in good faith and it takes more than just a few months to do that. It depends on what your credit in the past has been. If yours has been bad, it may take a year or more, but make sure each and every payment is on or before the due date, not only for your car but for everything you pay, including rent, lights, phone, anything, that way you can show you have been a responsible person who has been clearing up your debt and trying to get your credit back in order.
Good Luck.

Answer 4

I'm not sure how to address the question in terms of time. Understandably, the initial investment made towards purchasing a car does lower your credit score slightly due to the inherent increase of liabilities on your credit. However, if you do pay your bills on time, you should be able to raise your credit score. You may probably want to also take a small credit card with no annual fee and continuously pay expenditures on time and in full prior to the payment dates. This should help in showing that you are in definite control of your expenditures.

What helps my credit in particular is paying all of my bills under one single credit card and paying it off immediately. Particularly, an American Express charge card which forces you to pay your balance in full and with no real interest would be a great help in this aspect. You are going to have to pay all of your bills anyways, why not run it through the card first and pay it before any interest or late fees occur? That's my two cents. Hope this helps.

Answer 5

Congrats for you! We just did the same thing. As stated before, just pay that car loan on time EVERY month and your score will raise. I don't advise getting a high-interest credit like suggested by someone else. Stick with Debit cards so you can't overspend! If you must get a card, try getting American Express that you have to pay off every month (not Amex blue that allows you to just pay a minimum amount.) Keep up the great work. It feels great not to owe anyone money!!!

Answer 6

You credit report contains information that goes back for two years (longer for bankruptcy, criminal offences, etc.)

The loan is already improving your credit score. Each time you buy something using a credit card and make regular payments you are improving you credit score. It will take a while for it to come up and it will take two years to get rid of all the traces of your past problems.

Answer 7

Just wanted to congratulate you! I have doing the same thing right now, for the past year paying off my cards, not charging anymore my motto is now 'if i cant pay cash for it, then i wont buy it'... I still have 5 more months to go and then by the end of the year all my cards and even my car will be paid off!.... Info gets reported to credit agencies every month and as long as you pay everyhting on time and keep some cards open you will be OK!... Buy a house now

Answer 8

You should probably try to get one of those really lousy high interest credit cards from a company like capital one, or household bank in order to establish your credit, a year or so after paying good on that credit card try and get a real one from citibank or MNBA, you could also try getting someone to cosign on a home or an auto loan for you.

Answer 9

Ya it will make your credit build quickly :D! Just make sure to get your payments in on time.
How long will it take? Well I don't know what your previous score was like before you paid off all your debt. But it can't hurt at all!

Answer 10

congrats........good for you......pay your car loan on time...I'd check the credit score now and then at the end of the car loan....i'd say it'll take about 1 year from now to get your score up......get a credit card too......that will help also....

good luck !