I have a question, and though the answer is simple in my head- I would like to know what you all think and would also like to hear what you would do in my situation.
After working diligently on my credit report since June of last year- I have decreased my debt from over $20k to owing exactly $1,111 for old medical bills. Yes, they are mine- Yes I had insurance and PROOF that they had paid, but something happened..yadda yadda yadda- they took the payments back and now I am fully responsible...and thats fine (I guess. I have no choice other than it being "ok"...OR DO I??!).
I am in desperate need of a car. My plan was to take my tax return and use that for a down payment. The old accounts are due to fall off between Sept. of this year and Sept of 2014. I have never had a car loan. I want to come across as my best possible candidate for a loan as I am in the process of building credit for myself.
GET READY FOR A SLEW OF QUESTIONS
:Is it my score or the amount of debt I owe that has the most impact when it comes to being approved for a loan? How do I go about doing this in the most effective manner? Do I take some return money and pay off the CA in full? Do I go in for the car loan as I am now (the scores in my siggy are FAKO's- Im not sure where I stand score wise)? Do I settle with the CA?
My gut says to pay it all off, and when the time is right I may be able to negotiate better with the dealerships for a price. I am not sure what kind of car I would like or even the cost as of yet. Im guessing about a $10,000 car loan would be all that I would need as most of my return will go for the down payment.
Any advice is GREATLY appreciated. I have learned a lot from being a part of this forum and I trust that any advice given will be in good judgment
@currentlywinning wrote:I have a question, and though the answer is simple in my head- I would like to know what you all think and would also like to hear what you would do in my situation.
After working diligently on my credit report since June of last year- I have decreased my debt from over $20k to owing exactly $1,111 for old medical bills. Yes, they are mine- Yes I had insurance and PROOF that they had paid, but something happened..yadda yadda yadda- they took the payments back and now I am fully responsible...and thats fine (I guess. I have no choice other than it being "ok"...OR DO I??!).
I am in desperate need of a car. My plan was to take my tax return and use that for a down payment. The old accounts are due to fall off between Sept. of this year and Sept of 2014. I have never had a car loan. I want to come across as my best possible candidate for a loan as I am in the process of building credit for myself.
GET READY FOR A SLEW OF QUESTIONS
My gut says to pay it all off, and when the time is right I may be able to negotiate better with the dealerships for a price. I am not sure what kind of car I would like or even the cost as of yet. Im guessing about a $10,000 car loan would be all that I would need as most of my return will go for the down payment.
Any advice is GREATLY appreciated. I have learned a lot from being a part of this forum and I trust that any advice given will be in good judgment
Follow your gut. Work with CA and get in writing with PFD letter (atleast there is not harm in asking).
I would agree, get the collection paid (especially if you can get PFD), and then worry about the car if you can wait that long. I have one stupid collection on my report, applied for another secured card recently and when the lady looked at it: "a collection that's paid, that's good!"
Really? Well I guess better than it could be. Underwriting does look at such things, and I think all non-prime auto-loans go through some form of manual review. General rule with sub-prime auto loans, if you can get 20+% down, it's far easier to get approved.
Thanks for the tips Revelate. Yes, I had been reading here and there that 20%+ DP would be beneficial. Not only in getting me approved, but also in knocking down my monthly payment! And I think seeing paid/closed can ONLY help the more I think about it. Its not an insane amount and may be frowned upon if they see its still there 
Yeah, I'll give you a contrasting underwriting point when I bought my car from Wells Fargo.
"Oh man, you have an open collection there, seriously, get that paid; I shake my head whenever I see a customer with one of those." I don't know if he was referring to a collection at all, or the fact that it was for $173 and here I am putting down 30% on the vehicle.
Recovering $173 isn't worth the court costs, but in your case, I think it helps even more: "in theory" if the OC/CA suddenly sees an asset on record, they may go try to get a judgement and apply it against the asset (SOL and other things apply of course, I'm not an expert). I don't know how often or for what amount this is typically done at, but it's a risk that an underwriter almost certainly will be aware of I think, and that makes them a little more leery. It'd be one thing if the auto loan wasn't going to be reported, but honestly, don't waste your time looking for one of those, you absolutely *want* one that reports, as anything else is just throwing monay away as far as credit building goes.