The amount of time necessary to develop a credit file substantive enough to get a car loan varies based on your personal credit history. For young adults who have just started establishing credit, it can take a few years to get an adequate number of accounts and establish your good payment history. For borrowers with some bumps in their past, it may also take a few years for such blemishes to come off the credit report. While there is no definite time frame for building a credit file significant enough to get financed, making good choices helps improve your credit standing.
Payment History
The largest factor in calculating your credit score is your payment history. As MyFICO.com notes, 35 percent percent of your credit score is reliant on the payment history shown in your credit file. For young borrowers, it is especially important to pay bills on time, as they may have less open trade lines to offset late payments. When getting a car loan, your prior payment history on car loans is also pivotal. If you have a repossession or excessive late payments on an auto loan, it can be very difficult to obtain another.
Amounts Owed
MyFICO.com notes that the total amounts owed to creditors relative to your credit limits accounts for 30 percent of your FICO score, meaning that you should avoid having maxed-out accounts if you want to build your credit file sufficiently to get an auto loan. Although credit approvals for car loans are situational -- meaning that each borrower may have different requirements based on income level and other factors -- avoid carrying large balances on revolving forms of credit like credit cards.
New Credit
The number of new credit accounts and recent credit inquiries shown on your file also has a bearing on your ability to get a car loan. If you regularly apply for new forms of credit, your credit score may be lower as a result of frequent inquiries. Similarly, if you have a large number of new accounts, your credit score can be similarly impacted, as many new accounts can make you look desperate in the eyes of lenders.
Types of Credit Used
The variety of loans and credit cards on your credit report accounts for 10 percent of your credit score. To qualify for an auto loan, your credit file should include a range of credit types, including credit cards, student loans, lines of credit and retail charge accounts. Although meeting these qualifications does not guarantee credit approval, being proactive about your credit history can make waiting for an approval less stressful.
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