Cheap car or better car? Pay off cc in hopes of lower payment & Interest rate or refinance later?

[Anonymous]

My scores per CCT are: Experian: 568, Equifax:574, Transunion: 572. I have been working on improving my credit for years, and it has, they used to be in the 400s. My scores also recently got up over 620 in June but I racked up a cc bill due to an emergency, and they went down to about 550. Haven't paid late in 16 months, but I have 3 late payments on my account. I have 2 cc that are open, one closed with a high balance over the credit limit but always paid on time and says it's in good standing. I know if I paid off my cc debt my score would go up, but not sure by how much or how long it would take. Experian score has been going up about 10 pts a month. I'd have to pay off one card $700/1000 cl, another $250/400, and another $2300. 

I'm looking to purchase a car before the winter, I have a few thousand dollars I'm getting soon. I'm wondering if I should:

A) buy a cheap car outright (which could have mechanical issues I'd need to pay for)

B) finance a cheap (under 10k) car with subprime for now then refinance

C) finance a better car later (about 15k) that's safer for the winter months and I don't have to worry about small issues that may come with other cars. This would be the option if I were to take my chances and pay off my cc debt. 

I don't know if I should buy the car first, or if I should pay off my credit card debt to improve my score. With my knowledge, I'd imagine my score would go up to about 630-650 just from having my credit balances at zero. But then I wouldn't have the cash to put down on a car. I'd hope that I could find something with a low down payment once my scores are higher but it's not guaranteed. 

I've never purchased a car before, and I'm 25. I don't have anyone to cosign for me. 

[RushXTC]

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@Anonymous wrote:

My scores per CCT are: Experian: 568, Equifax:574, Transunion: 572. I have been working on improving my credit for years, and it has, they used to be in the 400s. My scores also recently got up over 620 in June but I racked up a cc bill due to an emergency, and they went down to about 550. Haven't paid late in 16 months, but I have 3 late payments on my account. I have 2 cc that are open, one closed with a high balance over the credit limit but always paid on time and says it's in good standing. I know if I paid off my cc debt my score would go up, but not sure by how much or how long it would take. Experian score has been going up about 10 pts a month. I'd have to pay off one card $700/1000 cl, another $250/400, and another $2300. 

I'm looking to purchase a car before the winter, I have a few thousand dollars I'm getting soon. I'm wondering if I should:

A) buy a cheap car outright (which could have mechanical issues I'd need to pay for)

B) finance a cheap (under 10k) car with subprime for now then refinance

C) finance a better car later (about 15k) that's safer for the winter months and I don't have to worry about small issues that may come with other cars. This would be the option if I were to take my chances and pay off my cc debt. 

I don't know if I should buy the car first, or if I should pay off my credit card debt to improve my score. With my knowledge, I'd imagine my score would go up to about 630-650 just from having my credit balances at zero. But then I wouldn't have the cash to put down on a car. I'd hope that I could find something with a low down payment once my scores are higher but it's not guaranteed. 

I've never purchased a car before, and I'm 25. I don't have anyone to cosign for me. 

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It's your choice on what to do with the money, But I do have one thing to advise you.

If you use Credit Karma, Go to your late payments and dispute them! They will be taken off within 1-2 weeks. It works 100% with 1 of them, the other one only works sometimes, I believe Equifax is the one that works, I did this for my girlfriend who had 1 late payment and her score went up by nearly 70 points by having it removed.

[Dalmus]

If you know somebody mechanical that you trust to inspect a used vehicle, your best bang for the buck would be to buy a used vehicle outright.

What are you driving now, and why is it more unsafe this winter than it was last winter?

[StartingOver10]

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@Anonymous wrote:

My scores per CCT are: Experian: 568, Equifax:574, Transunion: 572. I have been working on improving my credit for years, and it has, they used to be in the 400s. My scores also recently got up over 620 in June but I racked up a cc bill due to an emergency, and they went down to about 550. Haven't paid late in 16 months, but I have 3 late payments on my account. I have 2 cc that are open, one closed with a high balance over the credit limit but always paid on time and says it's in good standing. I know if I paid off my cc debt my score would go up, but not sure by how much or how long it would take. Experian score has been going up about 10 pts a month. I'd have to pay off one card $700/1000 cl, another $250/400, and another $2300. 

I'm looking to purchase a car before the winter, I have a few thousand dollars I'm getting soon. I'm wondering if I should:

A) buy a cheap car outright (which could have mechanical issues I'd need to pay for)

B) finance a cheap (under 10k) car with subprime for now then refinance

C) finance a better car later (about 15k) that's safer for the winter months and I don't have to worry about small issues that may come with other cars. This would be the option if I were to take my chances and pay off my cc debt. 

I don't know if I should buy the car first, or if I should pay off my credit card debt to improve my score. With my knowledge, I'd imagine my score would go up to about 630-650 just from having my credit balances at zero. But then I wouldn't have the cash to put down on a car. I'd hope that I could find something with a low down payment once my scores are higher but it's not guaranteed. 

I've never purchased a car before, and I'm 25. I don't have anyone to cosign for me. 

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Because you owe the $2300 and that line is closed - you are using (from what you posted) $3250 out of a total of $1400 which is a utilization of 232% which is killing your score.  If you can pay off the $2300 that will help you significantly because it will bring down your utilization to 67% and if you can pay off the $700 card then your utilization will be 17.8% which will help you tremendously with a much better score.

Getting your score up will put you in much better negotiating position so you don't have to take a subprime loan. Because you haven't purchased a vehicle before, read through the stickies above so you get an idea of what you need to do to prepare yourself.  You don't say what you make (income) and that is important to know so you can budget for something you can afford. $15k is a lot for a first car - considering you will have to pay full coverage insurance which adds to your monthly payment. 

IMO it is best to get your credit in the best possible shape before taking on a loan. It opens up the possibilities to you for buying and getting a much better deal long term.