Repair Credit Score

Archive for December, 2007

Question: can i get an auto loan with a Credit Score of 530?

does anyone have any idea what kind of interest rate i can get or if i can even get a loan. the only debt i have is a 4k school loan. i live in northern indiana. where should i look first. no buy here pay here rip offs.
i am self employed made 37 k last year and have been in the biz. for 4 yrs.

Answer: there are alot of other variables when it comes to financing instead of just Credit Score. being that your self employed it can make it alot more difficult. most secondary banks will require proof of income. if your self employed that means they need the last 2 years tax returns including your schedule c's. most self employed people write off as much as they can so they dont get killed on taxes or dont have to pay taxes. the problem w/ this is that you then cant prove your income. if you show negative income or a smaller income the bank cant use it. a few lenders i use will take the last 3 months worth of bank statements showing what you deposited to figure your income but there are only a few out there.
also student loans dont really count one way or another for you. banks dont look at them as credit and only take the pmts out of your budget. what other credit you have plays a big part in whether or not you can get financed.
your best bet is to put a large down payment down, the more you put down the more then lender will "forgive" credit problems or income issues. either way youll be looking at a high interest rate. probably whatever the state max is. here it ranges from 18% to 26.75%.

Rejected: At DriveTime you can still get an auto loan

Question: 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?

Answer: 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.

Credit Score Improvement Program

Question: how can i get my Credit Score higher with the high blanace credit cards?

Answer: No, do NOT close accounts. That is likely to DROP your score, especially if the account you closed was a POSITIVE trade-line.

To increase your scores you must pay ALL of your bills ON TIME every single month. Definitely pay more than the minimums. Your utilization on each card should stay BELOW 25%, so if you have a card with a $1000 limit, you should not carry a balance of more than $250 on that card. Your utilization counts against your available credit. If you are using too much of your available credit, creditors start to get nervous.

Closing a positive account just lowers your available credit and makes it look like your utilization is much higher than it might actually be, so it will DROP your score. Better to pay off the card and sock drawer it for a while and do not use it. Unfortunately, you have to keep using credit to keep a good score, but you must not go overboard and you must stay in control.

How High Does My Credit Score Have To Be?