Will buying a used car on credit help my FICO score?

I need a new car and have always figured paying cash was best. I have limited credit history that I messed up in college, so my score is 520-550. I was looking at a few used cars but figure a newer used car would be more reliable and need less maintenance. What effect will paying the loan on time have for me? How long before any benefits kick in? Will it improve my score more because most of my credit now is very small credit cards and this will be a big auto loan? I know making payments is kind of a waste, but I have the income to pay more, so I'm just focused on what, if any, FICO score improvement I can get.

Public Comments

1. Yes it will if you pay all your payments on time.
2. Instead of getting additional loan, you should get rid of loans or close store cards. Reducing loan-to-income ratio, getting rid of store cards and long established payment history help raise FICO scores.
3. Get the loan, but make it as small as possible.. and pay it off completely after 6-8 months. if you are making payments on time .it may take that long to be reported example: I just bought a new truck. I was going to pay cash. instead I financed the 25k through the credit union. That will show on my report as a large loan. Then I paid off 24k, and set the remainder to be auto-paid monthly and off in seven months so I did not have to pay a bunch of interest. I did this at their advice, because I asked why my FICO was not perfect, and I was told because i had not borrowed any money for a car , and my house loan had dropped off because it had been paid off so long ago. They said this should get my FICO to within 20 points of perfect. Yours will go up 30 or more points because of this, because it is so low now. Also, are you paying on college loans. Make sure those are all reported as well.. A lot of young people mess up their credit ratings in college, but it can be improved over time.. and do not finance the car through the car dealer. Go to your credit union. Join one if you are not already a member somewhere.