Credit card v car loan

[engin33ring_eagle]

I have visited this site a few months ago when I was starting to clean up my credit. With the help of everyone here I have since then removed/paid off any and all outstanding balances and collections on my credit. I am fortunate to have someone help me out with the next step of establishing credit (co-sign). Here is my situation:

4 years, I purchased a car under someone elses name because I could not qualify for a loan. I now only owe approx $4,000. Should I get a car loan under my name with a co-signer? Or should I begin with a credit card? Which one will be better for me to establishing my credit?

Let me know if this message is confusing.

[Junejer]

What does your current CR look like? Are there any TLs left or are they all deleted?

[engin33ring_eagle]

Here is what is on credit history:

amex in good standing for 5 years never late.

4 collections account - paid ( all between $150 - $600)

1 levitz account - paid but 30 day twice and 60 days late 1.

everything else has been deleted. score was 595 before 4 collections were removed. just paid the balances off this month so they have not updated on the bureau so i do not know what it is now or if will even move up.

I was thinking of getting the car loan under my name with a co-signer (score of 750). But what would I do from there? where can I start? or is that even the best way to go?

[Junejer]

First, let me say, that paying the collections does not remove them from the report. I hope that you worked out a PFD with them, so that they are expunged from your reports.

How old is the 60 day late on the levitz account?

I would wait until the dust settles and see where your score lands. You may not need a co-signer.

[engin33ring_eagle]

yes they were PFD. Should i wait to see if i qualify for it alone? Also, the levitz account was paid about 3 years ago, so the 60 days late was probably 4 years ago.

The main question I have is. Would it be better to get the car loan then in about 6 months apply for a CC or should I apply for a CC now and wait for the car loan? What it make much of a difference?

[Junejer]

Sorry eagle, I have been absent for a few days. As I stated before, I would wait until the dust clears before making the decision on any of this, quite frankly. If your scores are good enough, you might not need a co-signer. Also, if you need a car, then get the car loan first. If you don't have an immediate need for a car, then I would apply for a CC, as this is the quickest way to get a score increase. Make sure you don't allow more than 1-9% of the CL to report to the CRAs though.

[engin33ring_eagle]

we'll i'm driving the car now it's just not under my name. But if a credit card helps out more when it comes to establishing your credit then i'll probably end up doing that.

Thanks

Message Edited by engin33ring_eagle on 01-24-2009 03:11 PM

[RobertEG]

Quite simply, revolving credit util counts more in FICO scoring than installment loan util.  So based only on %util, getting a CC and keeping the %util low has a higher benefit

Opening an installment (car) loan will improve your credit mix in FICO scoring, but the impact is only 15% of total FICO score.

I would get a good CC before trying to secure an installment loan on a car that you apparently dont really need now.

Message Edited by RobertEG on 01-25-2009 12:00 AM

[engin33ring_eagle]

ok. I'll work on the CC first then I'll work on the auto loan .

Thanks for all of your help