First Time Auto Loan Score Boost Possibility

[Anonymous]

Hi there - I have a credit scores betweem 560 and 580. I have improved my credit score with some newer lines of credit and with some AU/Joint credit cards from my mother. However, I have had a couple of accidental late payments which I have since corrected for 60 days now. I am hoping this will improve my score within 4-5 months of perfect history without my lates. I am in need of a new car and am thinking of just paying cash for a 3k car, I am not looking for anything fancy. But I thought since I had the money maybe I should finance one and just pay it off early or get a short term loan from a "pot lot". I am hoping maybe this would boost my score a bit since I have NO previous installment loans.

So here are my questions:

Any idea of initial credit score decline due to AutoLoan inquiry and/or new autoloan?

Any idea of possible score boost if I obtain a car loan that is for a small amount but paid off in about 4 months?

Thanks for your help!!

[Anonymous]

I'm not sure how much your score will go up or down, but having an installment loan with payments made as agreed will help your score in the long run.  Paying it off in 4 months may not help a lot as it will likely lower your average age of accounts.  With your scores and the current credit environment, I imagine you will have a difficult time obtaining a car loan.  What you might consider doing, since you have the money currently is to go to a bank and look to get a CD secured loan.  As the loan will be secured by cash, the bank will have little to no risk and as a result you should get a approved and get a good interest rate.  3.00% over the CD rate is fairly common.  Good luck.

[203bravo]

I would caution you from going to a "buy here - pay here" place.  I think that's what you mean by "pot lot".  The companies usually don't report credit unless you default and then they are move than happy to trash your credit.

[Anonymous]

In case anyone is interested in a status update on this. I successfully obtained a car loan through a local credit union and was approved. Credit scores ran at around 580ish. I received a rate of approx. 12% for 60 months. It wasnt hard at all actually it was frihtfully easy. I thought given the current economic state it would be more difficult.

Just an FYI! Good luck to all.

[Anonymous]

Congrats!!!!!!!!!!

in actuallity, when securing a car loan score is NOT the only consideration.

Other factors can mitigate and influence the decision.

car loans are easier to secure then open lines of credit as the vehicle can be repo-ed and a portion of the loan can be recouped- something that cannot be done with a trip to vegas charged on a Visa card.

At 12 percent you are probably at the outskirts of your CU's approval range

[LindaLu]

congrats!!

I am also in your boat..I have one recent late that I feel is incorrect and am currently disputing but don't have any others in the last 2 years..but i have a bankruptcy chapter 7 that just now turned 2 years old.  did you by chance have a bankruptcy on your credit report?

Also wondering what your credit card utilization was like because mine is a little high and thought that might hurt me.

thanks and good luck in your credit rebuilding!

[clocktick]

Congratulations!  What did you end up purchasing?