Basically, yes: the returns are diminishing. There are two types of debt (for the purposes of your credit score): revolving (you regularly borrow money and pay

Basically, yes: the returns are diminishing. There are two types of debt (for the purposes of your credit score): revolving (you regularly borrow money and pay it back, like a credit card) and fixed (you borrow a lump sum and make regular payments). Just having any type of fixed debt at all (car loan, mortgage, even a personal loan) is a huge boost to your score. Thus, a second car loan will make much less of an impact because OP would already be getting this boost from their first loan. (Similarly, having any type of revolving debt at all provides a boost, so for anybody new to the credit score game try to get any shitty credit card that will approve yoy and buy at least one thing with it each statement). On top of that, getting approved for a second car loan (at the same time) is wayyyy harder than the first. I have no idea why this is, as the economics should be the same, but maybe lenders have some data that shows people with two car loans are more likely to default or something. I generally wouldn't recommend this strategy to OP unless they were already going to buy a second car for a spouse/family member/etc. Cars depreciate very quickly even if you don't use them at all and the score boost won't be very big.