Dear Liz: I’m one of the beneficiaries named in my late relative’s will, and plan to use the money to buy a new car. Should I pay cash up front and avoid the interest charges on a loan, or set up monthly payments to help enhance my credit score (currently just under 800)?
Answer: A car loan might boost your scores, especially if you don’t already have an installment loan such as a mortgage on your credit reports. But once your credit scores are in the high 700s, you’re typically getting the best rates and terms from lenders. You’d be paying interest for no reason other than bragging rights.