|
 Dear
Terry,
I just bought a car and financed it through the dealer. The
only reason I did this was because I am coming into a large sum of money in a
week or so and figured I would just pay off the car loan when that money arrives.
However, my credit is not that great and the auto dealer told me that if I made
at least six months of payments on the car before paying it off that it would
help my credit score. I understand the dealer is making money on the interest
I will pay until the loan is paid off. Is it true that I would have to make payments
for six to 12 months for this loan to show up on my credit report? If so, why
is that? Why can't I just pay off the loan at any time and it show up on my credit
report as a satisfied loan and boost my credit score? I hate the idea of payments
and was ready to pay off the loan as soon as my money comes through, but I'd also
like this to help my credit situation, too.
-- Dana
 Dear
Dana,
Any payments you make on a loan are likely to
show up in your credit report, but lenders want
to see a history that proves you are capable and
committed to making regular payments on time.
That's why your credit score is
likely to be helped by showing at least six months
or more of timely car payments. If you can do
that, I think it's a good idea and will not cost
you that much in interest over such a short term.
But if the thought of having car
payments keeps you up at night, by all means pay
it off as soon as possible.
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