car loan post BK7+ Refi?

[Anonymous]

I wrote before but still have questions. Our BK7 was discharged in November. No cars on the BK. credit scores 580-608. We recieved a secured card from Wells Fargo and then very quickly got unsecured cards from Cap One, my credit limit is $2000. I need a car with an automatic transmission (due to multiple hip surgeries and now two fake hips) and my current car is a manual. I applied with Cap One again and was approved for up to $30k but the interest rate is 17%.

Questions--

1. How long will making good payments on my cc's take to improve my credit score? We are charging less that 30% and paying in full as soon as the statement cuts.

2. Should I take this loan since I have to have a car and then refinance in 6-12 months? What is the best refi path to take?

3. If I join a credit union now, are they likely to give a loan with better rates or do I need time for them to trusy me, perhaps with a secured card from them?

4. Is it true that if I apply for several auto loans, it will be lumped together on my score and not cause individual dips?

Thanks a lot for any replies. I am getting desparate to make a move. I have been unauthorized to drive post-surgery until 1/1/15. I have lots of physical therapy appointments coming up and realy need a car I can drive. TIA.

[TRC_WA]

1.  Improve by how much?  Credit rebuilding is a marathon... not a race.  I started in May 2013 and my scores have went up 40-60 points each in 18 months.

2.  If you have no other options... sure.  I bought a car the week of discharge and got it at 8.9%... then refi'ed in 10 months with my CU at 3.99%.

3.  Mine told me in May 2013 to come back in 6 months after establishing a payment history with other lenders.  I started with CapOne and came back in December 2013.  My CU gave me a Rewards CC then refinanced my car 3 months later.

4.  That's what they say.  I have about 12 INQ's on my report from May 2013 when I bought my car that are due to fall off in 5 months...  I think they weren't coded correctly and really damaged my score at the time... now they don't much matter.  I am considering trading my car in later this year but when I do I will go straight to BECU and get a loan... 1 inquiry instead of getting a dozen from dealer financing.

[PowerInNumbers4]

I hope this helps,

I discharged in OCT 2012 and i needed a car. i think i was in the hi 500CS. they offered me a high 14% interest rate as well. i needed a more reliable car so i took it. the payment was still in my budget and it was an opportunity to add another line of credit. a year later i refinanced at 7%.

There might have been a better way to get a lower interest rate right away, like going to a credit union as you suggested but i wanted to refinance a year later so i could add another account to my credit history.

 early on, in my credit rebuilding journey just building new relationships was the most important thing to me. might not have been the smartest thing but i knew if i paid on time other creditors would give me more favorable interest rates when the time was right. fast forward two years i just closed on a house with 4.25% not bad for a fellow BK guy.

I wish you nothing but the best.

[PowerInNumbers4]

As for refinancing a car loan. i used lending tree. My experience was good with them. i filled out a pretty easy application and i had a half a dozen lenders call me and offer a loan, it was pretty slick if you ask me . some offers were better then others. i chose wellsfargo with a little higher rate 7% then some of the others just becuase iwanted to have a loan with them. they sent me some paper work next day mail and i think we had the refi done in a week.

Best of luck.

[Anonymous]

Have you tried DCU?

[StartingOver10]

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@PowerInNumbers4 wrote:

As for refinancing a car loan. i used lending tree. My experience was good with them. i filled out a pretty easy application and i had a half a dozen lenders call me and offer a loan, it was pretty slick if you ask me . some offers were better then others. i chose wellsfargo with a little higher rate 7% then some of the others just becuase iwanted to have a loan with them. they sent me some paper work next day mail and i think we had the refi done in a week.

Best of luck.

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The only downside I see is that you could end up with a ton of inquiries when you use Lending Tree.

Power, how many inq's did you end up with when you refi'ed using Lending Tree?

[Anonymous]

Thanks for the advice. I may try DCU for a lower interest rate. I was just wondering if I waited a few months, would timely full balance payments jump my score at all. I'm in this for the marathon it is but this darn car is what's most pressing.
And while I'm asking questions, is it best to have a zero balance (pay in full each month) or leave some amount? Thanks again!

[Anonymous]

I would try with DCU. You rec'd 30K from Capital One so you should not have any issues with DCU. Apply over the phone, I found it much quicker. I had an answer within 10 minutes. You will need to become a member which you can do when you call. In order to receive the 1.49 for 65 months you need to open a checking account. I did not want to transfer my accounts from my current bank, so I opted for the savings account which gave me the rate of 1.99. Was fine for me.

As far as your credit cards reporting. You should leave one reporting a balance of 1 to 9% when the statement closes and then PIF after it has reporting and before the payment is due. You can rotate cards each month to do so.  Happy New Year

[Anonymous]

Really great advice @beachglass! Thank you! I had already applied online to DCU before I had a chance to read this. I received an email saying they would get back to me soon. I like the savings account idea tho.
And I will follow your great advice about cards with rotating as well. We had absolutely no credit card trouble with our BK, it was all medical bills. We have never lived on credit so it's actually odd for us to use it! And I certainly don't want to start now, only enough to raise our scores.
So thanks again. Great and well-received advice

[Anonymous]

My pleasure !! As far as the credit card usage, just use carefully. I never charge over 10% of my available balance. You can try using it for groceries or normal weekly expenses and then just PIF so you never are charged interest. Just remember to leave that small balance reporting on one of them when the statement closes. Ideally you should have 3 cards, but many say not needed, two will work. Everyone's journey is a little different. Best of luck to you on your car loan. Keeping my fingers crossed for you.