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letmebedebtfree

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Car Loan and credit score question
In a few weeks, I am going to get a car. I want the car to be in my name and I know my credit isn't the best. However, my father, who has good credit, agreed to co-sign on the loan if I am eligible. I plan to have this loan paid off by May of next year. The car cost just under $10,000 and I am putting $3,000 down. Instead of paying the recommended $175 a month, I plan to pay $500 a month (funds I have already allocated just for this purpose) and then pay majority of it off at income tax time.

My question is, will my credit score go up after I pay off the entire loan? Or will it only count towards my father's credit since it is basically his credit and good grace that is making all of this possible?

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It will count on your credit and if you do not pay promptly it will hurt your fathers credit.

Paying it off early is of no real benefit to your actual overall credit score. As you build credit with credit cards it is very beneficial to keep your debt to less than 20% of your total credit limit, but not less than 1%. Auto loans are slightly different than revolving credit like credit cards.

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