credit score improvement-is it worth it??

[Anonymous]

Hello all,

i am planning on purchasing used car. i had planned on buying from private seller since i have the cash money. im thinking that maybe since my credit is bad due to bankruptcy a year old, maybe i should finance car (asuming i can find some one to finance) and improve credit score that way. i would pay off most of it in one shot and maybe leave about 4 to 6 months on payments to pay off the rest. obviusly i will be paying interest and probably high ones since credit is not good.

my question is if i only end up with a timely payment history of 4 to 6 months on this purchase will my credit score improve that much anyway. if it is not going to improve that much, thinking that the hundreds or thousands i will end up paying in interest may not be worth it. any suggestions, ideas, or comments are appreciated. thanks in advance to all.  

[sobreezy]

Welll IMO if you are trying to improve and diversify your CR then why not put money in a CD and take out a loan against it (installment), get a secured CC and try to pay off any other debts of course using PFDs, GWs and DVs.  You don't want to have too many big ticket things out there when these small things will help to improve your score.  Just my 2 cents

[Anonymous]

sorry for the very late reply...actually i do need a car so improving my credit was something i wanted to do along the way. but wondering what  are PFD's, GW's, DV's and CD??

[sobreezy]

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@Anonymous wrote:

sorry for the very late reply...actually i do need a car so improving my credit was something i wanted to do along the way. but wondering what  are PFD's, GW's, DV's and CD??

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I apologize for the even later reply.  Anyhoo if you haven't already visited the rebuilding credit forum please do they have a frequently asked thread with answers to all common and some uncommon questions.  But here are a few to get you started

PFD - pay for delete - used to remove really bad trade lines from credit report, not always accepted though

GW - goodwill - normally used to politely asked for a creditor to remove late pays, or even entire trade lines

DV - debt validation - used to have CAs (collection agencies) verified and prove that they actually have their papers in order and can show that you owe the debt they say you owe.

[kjm79]

One of the best ways to start rebuilding credit after a BK is to get new credit and start building that new positive credit history.  Opening the new installment loan, depending on other factors, will most likely hlep you score.  Now, once you pay it off and close it, you may lose a few points as you will no longer have an open and active installment loan. If you haven't, you should also see about getting a secured cc or maybe search the cc forum for BK friendly cards with your scores. 

Overall, getting the loan will help your score.  The installment will be a positive account after the bk and will stay on your reports for 10+ years after it's paid off.  My DH had scores in the low 600's after our BK and got a loan through NMAC for 9% on brand new truck.  Not great, but not nearly as bad as we thought it would be.