FloridaShock Tracker

Afraid to Refinance

FloridaShock — Tue, 09 Oct 2012 19:57:55 GMT

Hi all,

I've found some great information on the myFICO forums and it seems that there are many knowledgable users on here. From a newbie like myself, I would like to apologize in advanced for what may seem like another repetitive "refinancing" post.

I got my first car financed through BB&T back in January (2012), financing approx. $10.8k @ 16.4% APR. I know this APR is super high, BUT I was going to need a car sooner rather than later, had no possible cosigners, and I knew I could afford the payments, while having it help to build my credit from a non sub-prime lender. At this point my credit was shot, as I had charged off about $4k worth of credit cards sent to collections in 2010, along with numerous late payments.

I began closely monitoring my credit score through myFICO Score Watch in August, starting at 535 and today I just got up to 588. I currently have two credit cards I've had for about a year with low credit limits, one secured. Use them lightly and typically pay off entire balance each month. I've also made every car payment to BB&T on time over the past 10 months and have payed more than due on several occassions.

So, I was wondering at what point should I consider refinancing this loan? I'm kind of nervous, because I don't want to draw negative attention to myself, but I have show a better credit history, I'm just not sure if it's long enough. My credit score still isn't great yet.

Thanks a lot!

Re: College Student Overwhelmed By Road To Improving Credit

FloridaShock — Tue, 28 Aug 2012 02:55:00 GMT

I guess I do need to remember that even if I begin contributing a little bit here and there, it's still progress rather than sitting around wondering how I'm going to improve my finances. I know food and entertainment expenses are definitely areas I could significant cut back on. I would imagine I spend $200/mo on full service restaurants, not including fast food and coffee. Thank you for the advice! I really appreciate it.

Re: College Student Overwhelmed By Road To Improving Credit

FloridaShock — Mon, 27 Aug 2012 03:55:12 GMT

Right. I think one of the reasons it has taken me so long to really address this and actually do something about it, is because I haven't really even known where to start. For example, how much should I be using to pay down debt vs how much should I be setting aside in case of unexpected expenses? I have a tendency to spend what I earn, whether that be on bills or day to day expenses. I'm also not entirely sure what a realistic timeline. Also, my debt-to-income ratio won't be improving anytime soon, so how much will that impact it?

Thank you again for the advice!

Re: College Student Overwhelmed By Road To Improving Credit

FloridaShock — Sun, 26 Aug 2012 23:40:10 GMT

That's true Shogun, the auto loan is probably what I should focus on first, as it is also the loan that would have a more immediate impact should anything go wrong vs the student loans which are deferred.

It's been a while, so I don't know exact numbers, but I settled 4 CCs - most were around $500-800 and were settled for about half those amounts. The Citi card was at around $3k, settled for around $1,200. I still owe $10k on my car, no penalty for early payment, not exactly sure how many payments I have left.

One of the biggest reasons I'd like to begin this process is because I've been ignoring just how much debt I've taken on and it wasn't until I needed to finance a car back in January that I felt the immediate impact of having bad credit. On one hand discovering how much debt I have has been a bit of a downer, but at the same time I also have a sense of relief now that I feel like I'm beginning to gain control of my finances, even if the first step is simply knowing how much I owe.

Re: College Student Overwhelmed By Road To Improving Credit

FloridaShock — Sun, 26 Aug 2012 21:55:36 GMT

Thank you for the reply annielorie!

What does goodwilling my settled accounts entail doing?

The student loans are still in deferrment, as I'm still going to school full-time and have about a year and a half left until graduation. I want to say the interest on the federal student loans is around 6-7% and the private student loans around 9%, but I am not 100% certain. I'm considering paying a small amount to the private student loans now, since those along with my auto loan are probably my most expensive debts. Ideally, I would definitely like to pay off my car ASAP, as I still need to pay off about $1,500 of the principle balance until I'm at the point where the cars value is equal to or more than what I owe on it.

I'm pretty much on my own when it comes to anything related to finances, as my parents are uncomfortable putting my name on anything due to my credit history thus far. So, anything I do will have to be done on my own!

I'm located in Virginia.

Thanks again,

Blake