Does having an auto loan for only 6 months help or hurt my credit score?

I'm a year or so into rebuilding my credit. I have a few revolving accounts I am doing well with. I am about to take out a student loan. I was going to buy a used car outright soon. Instead, I am thinking about taking out an auto loan for a newer used car for the credit benefits. However, I will probably only need the car for about 6 months. If I sell the car, thereby canceling the (I assume 5 year) loan after only 6 months - will this still help my credit or will it hurt it? Also, though I don't really need it beyond 6 months, I could use it for say a year. It's always possible but unlikely I would need it beyond that (live in a city). I would consider the year if that made a big difference. That may seem extreme but I would like to buy a house in the next couple years, and am working hard to build good credit. I have googled around, but have yet to find an answer to this specific question. Thanks much.

6 months of good payment history on an installment loan is better no history or bad history.. very simple.. hope this helps Source(s): Citigroup Employee

Cancel your loan after 6 months? You can't cancel a loan. You can pay off the loan and sell the car or you default on the loan. Paying off the load early won't hurt you. If you default on the loan, it will hurt your credit report.

IMO, you should buy the cheaper car and pay cash for it. Car loans are a bad idea anyway and if you only need it for a short time it is a worse idea.
Auto finance is what I do for a living and you need to make at least 12-payments before you pay off the loan.

This is the first thing that a lender looks for when asked to approve someone is at least 12-payments made as agreed on a installment loan over $2,000.00.

12-payments will also help your credit score since a full 35% of your score is made up of payment history.
Finance Manager for over 7-years.

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