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Car Loan / Credit Score Question
Posted on 4/27/11 at 7:13 am
Posted on 4/27/11 at 7:13 am
I'm about to buy a used car for $8k, I can pay for it in cash, but I really need to get some credit because I don't have any history other than a mortgage that I just started a couple months ago. So my question: let's say I put $4k down and take out a $4k six month loan, but pay the entire remaining $4k on the first payment. Will this reflect just as good on my credit score as it would have had a made regular payments for the 6 months, or if I paid them regularly on a 12 month loan? I'm just not sure if they want to see you pay off money you borrow or they want to see you made regular payments, which is it that brings up your score?
Thanks in advance!
Thanks in advance!
4
Posted on 4/27/11 at 7:19 am to Rush2112
quote:
I'm about to buy a used car for $8k
quote:
I can pay for it in cash
quote:
but I really need to get some credit because I don't have any history other than a mortgage that I just started a couple months ago
You have a house and now you will have a paid for vehicle. What else do you need credit for?
Posted on 4/27/11 at 7:48 am to Will Cover
quote:
You have a house and now you will have a paid for vehicle. What else do you need credit for?
Your FICO score is not an accurate reflection of how well you are doing financially.
This post was edited on 4/27/11 at 7:50 am
Posted on 4/27/11 at 7:56 am to Will Cover
quote:
You have a house and now you will have a paid for vehicle. What else do you need credit for?
I'm only 23 and because of my lack of credit and recent mortgage, I got turned down for a Lowe's credit card.
Posted on 4/27/11 at 8:00 am to Rush2112
Pay cash for the car. Paying this off in 1 month will not get you what you are looking for.
Go and get a gas card, use this to fill up each week and pay it off at the end of every month..this will help you the most
Go and get a gas card, use this to fill up each week and pay it off at the end of every month..this will help you the most
Posted on 4/27/11 at 9:01 am to Rush2112
Depending on the car and its value and depreciation since you are only trying to get a loan of 4k many banks will refuse that loan depending on the car. There are a lot of terms that have to be satisfied on a used auto loan. The bank may want you to take out a loan of 6k. Or they will hit you with a pretty heavy rate. The bank has to make money off the loan. There isnt a whole lot of room for profit on a 4k car loan and a lot of risk. So dont expect great terms if any.
Posted on 4/27/11 at 9:15 am to Catman88
quote:
There isnt a whole lot of room for profit on a 4k car loan and a lot of risk
Posted on 4/27/11 at 9:16 am to Rush2112
quote:
I'm only 23 and because of my lack of credit and recent mortgage, I got turned down for a Lowe's credit card.
Pay cash for the car. As said before, you already have your mortgage. What do you need a Lowe's credit card for?
Posted on 4/27/11 at 9:17 am to Rush2112
quote:
I got turned down for a Lowe's credit card.
That sucks. To hell with lowes, take your bidness to home depot.
Posted on 4/27/11 at 9:18 am to Rush2112
Rush, when my son graduated last May, our banker (and friend) recommended that he pay his car loan for 12 consecutive months and then pay it off.
FICO is not a complete picture of a person, but unfortunately employers and insurers are using it in evaluation.
FICO is not a complete picture of a person, but unfortunately employers and insurers are using it in evaluation.
Posted on 4/27/11 at 9:34 am to wegotdatwood
Nobody wants a old car to have to sell in auction. If the car is over 10 years old even with only 4k as the loan the bank may only get 3k for it in auction after fees. Bank would then be 1k in the hole on the loan.
To offset the risk the bank will often offer the loan at a really high interest rate. Wouldnt be suprised to see 20+ with no credit and small amount on an old car. Otherwise they wont offer at all.
My bank will NOT offer a loan on a used Kia over 4 years old for example since they are not worth shite in car auctions.
To offset the risk the bank will often offer the loan at a really high interest rate. Wouldnt be suprised to see 20+ with no credit and small amount on an old car. Otherwise they wont offer at all.
My bank will NOT offer a loan on a used Kia over 4 years old for example since they are not worth shite in car auctions.
This post was edited on 4/27/11 at 9:38 am
Posted on 4/27/11 at 9:53 am to CidCock
quote:
What do you need a Lowe's credit card for?
I've been spending a lot of money there since I bought my house, and it offers 5% back. But it's not really that I want the card, it's the fact that I can't get one if I really wanted to and there's no reason I shouldn't be able to.
Another reason they listed is that I had too many inquiries in the last 6 months. It's frustrating that they don't check my salary, savings, or the fact that I own a home, but they consider me risky because the mortgage, cable, and electric company ran a credit check when I moved.
Posted on 4/27/11 at 9:59 am to Rush2112
I didn't know Lowe's had 5% cash back? Is their a fee on the card. If not, I'm signing up as well 
Posted on 4/27/11 at 10:17 am to CidCock
Posted on 4/27/11 at 2:45 pm to Catman88
That's makes sense but I didn't think a bank would worry too much about a 4k total loan and maybe losing on 1k. Thought that just because they do loans for houses and nice cars that cost more, which led me to think there is much more risk in those. (Didn't think about resale if they didn't come through.
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