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Posted in Auto Loans
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Question By
GDIklz

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My credit is 728. Would it be beneficial to take a $5000 car loan to build credit, or just pay cash?
I am a 21 year old college student, and I have the ability to pay cash for a used car.

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A loan will increase your credit score, but 728 is a pretty good score already, so whatever makes sense to you.  If you take out a loan then your auto insurance will be higher because you'll have to purchase full coverage.  Plus you'll be paying interest on a loan, so I think I'd pay cash.  Keep up the good work!

Reply by
GDIklz

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Thanks! Would it be beneficial specifically to have the auto loan installment credit on my record when I go go purchase a house in the future? Or will my student loans that I will begin paying when I graduate next year be sufficient for installment credit?

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