Hi all,
I filed bankruptcy about 8 years ago and afterwards I was doing an okay job rebuilding my credit, but then when the economy took a slump I quickly ran into financial problems and ended up having to default on an auto loan I had. I still owe about $9000 for the car, but I talked to the company holding the debt, (was HSBC but they no longer deal with auto loans), and was told I could pay it off for $3500.
One issue that is making me unsure as to what to do next is my car....it has a lot of mechanical problems and the costs to repair them are far more than the car is worth. I really just need a different car, nothing special, just a good cheap used car. I want to pay off the old auto loan, but then I won't have anything in case my current car takes a dump. Even if I could get someone to co-sign an auto loan I don't think I'd really want to do that because most good banks won't finance the kind of used older cars that are in my budget, usually a good bank will only finance cars in the $10k and up range but I'd rather get something in the $5,000-7,000 range at most.
I also want to get a secured credit card because that really helped me after my bankruptcy to begin rebuilding credit. I used Orchard's secured card and I had no problems with them at all and enjoyed their customer service, however I don't think they would take me back because I defaulted on that card as well after they transfered it from a secured card to an unsecured card. I was looking at Citi Secured cards but then noticed some people were being rejected in this forum, which I didn't expect.
So I need some tips or advice on how to move forward. Currently I'm employed and moved back in with my mom, (big hit on the ego...but it's helping me get back on my feet), and I've been paying off as much as my debt as I can. I've paid off all credit cards that were in collections and as far as I know all that is left is the auto loan. It's been a while since I checked my credit scores but I don't want to do that too often so I'm not exactly sure what it looks like right now, but the last time I checked it was around ......wait for it........500. Yea, really bad!
Should I, (or is it even possible), to get a secured card before paying off the auto loan, or is it best to pay that off first? I want to rebuild my history as quick as I can so I figured the secured card would help, then my credit should get a good boost once I pay off that auto loan. Like I mentioned above I'm living with my mom so I don't have a lot of payments and through my years of mistakes I've learned enough about credit cards to know never to charge more than I can pay at the end of the month so I know I won't have any problems with any card I get, that's why I want one soon so I can start improving my credit score.
