I want to buy a car to help raise my credit score, but I only want to have an older car, don't need to care to take on more debt that neccesary, I'd like to buy something for under $5,000. Most banks won't finance older than 7 years or less than $7,000. I don't wish to get into car payments, but need to bring my score up over 700 so I can start looking to buy a home. While I could just buy a car cash outright for a few thousand dollars, it takes away from my savings and does nothing to build credit, so I'd like to get a loan to increase the amount of accounts I have in good standing.
If I get dealer financing, how to I know that they will report my good payment history to CRA's? (other than asking them and hoping to get an honest answer)
You can always search in here...some will report whether or not their reporting. Otherwise you have to take their word.
Before you buy a car just for the sake of credit score, I think you should post some more details on your overall credit profile, perhaps in the general or rebuilding forum, and get some general advice on what you could do to bring up your score. If you have a current need for a car, then buying a car while also improving your score is a good goal, but I don't know that I would buy a car just for score without exploring other options.
Will be buying a cheap car anyhow, just wanted to make payments for the purpose of positive credit reporting, but if it doesn't get reported there's no point in it I could just pay cash for the car.
Buy here pay here lots generally do not report to credit bureaus. They also do not generally check your credit. Your down payment and employment is usually your approval process. Ymmv as in there are a few that do check credit and will report. The one thing that usually happens which would make them report is non payment and or late payments.
In my opinion you could ask them if they report to the credit bureaus before making a purchase.
Another thing depending on what your scores are now is that purchasing a car may not boost your scores to reach the 700 mark. Possibly even lower your scores for a short period of time.
I see that you are looking at the possibility of a mortgage in the future... since that is the case, I highly recommend that you check out the MyFico Mortgage Loan forum.
Below is a short list of helpful mortgage loan related links that may help you prepare for the process:
Guide to Common Abbreviations - Barry
Mortgage Acronyms & Abbreviations (what does PITI mean?) - ShanetheMortgageMan
Good Faith Estimates Explained - ShanetheMortgageMan
The Mortgage Pre-Approval Process - ShanetheMortgageMan
Evaluating Conventional vs. FHA (VA & USDA)- ShanetheMortgageMan
Definately feel free to post any questions you have about DTI and Pre-Approval Odds over there! In addition, you may qualify for downpayment assistance as well as other programs to help you get into a new home!
Best of Luck to you!
Just ask for CLI on your current cards and keep utilization low.