Car payments help rebuild credit

Dear Terry,
In an earlier piece, you advised rebuilding your credit by getting a high-interest credit card. I have an auto loan that I was able to keep despite my bankruptcy. Does this qualify as credit rebuilding?

Also, I checked my credit score recently and it is 580. Could this score possibly get me an auto lease or is it too low?
-- Sherri

Dear Sherri,
Making payments on a current auto loan will help your credit in the long run, but you can't expect your credit score to rebound quickly. And I'm sorry to say that a 580 score probably won't get you a lease or even a conventional loan that doesn't carry a painfully high interest rate.

My advice is to keep the vehicle you've got until it's paid off, which will help your score.

Here are this week's reader questions:
Certified cars offer value, reassurance
Can I cancel my car deal?
Do car payments help rebuild credit?
Will returning my car have repercussions?

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