First Timer - Need Advice

[Anonymous]

I am aiming to apply for my first used auto loan ($20,000.00) within the next six months. I am 31 years old with a FICO score of 628, and my monthly net income is $2,400.00. My monthly bills are less than $1,000.00.

My goal is to raise my score at least 20-30 points before applying.  I plan to do so by continuing to pay timely on my student loans and applying for and paying timely on a credit card, as I have read that this is a good credit building mechanism.

IF I don't reach my goaled score:

1) Should I apply, and then refi in the next year if I am approved?

2) Would I be better off with a cosigner with low to mid 700's score?

3) Any suggestions on lenders?

[Anonymous]

I would try with a credit union to get a pre approval. Ask if they use auto enhanced scores, which are usually better. CUs also give a great rate as oppsed to a retail bank.If you get turned down they will at least give you accurate credit scores.

[sccredit]

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@Anonymous wrote:

I would try with a credit union to get a pre approval. Ask if they use auto enhanced scores, which are usually better. CUs also give a great rate as oppsed to a retail bank.If you get turned down they will at least give you accurate credit scores.

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Not necessarily.  With no installment history OP's Auto-Enhanced could, in fact, be lower. 

[Anonymous]

If you apply for new credit card, your score will drop initially due to the inquiry and new account. It takes about 6 months for your score to rebound and jump above the original score you had before applying.

[SamsungHDTV]

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@Anonymous wrote:

I am aiming to apply for my first used auto loan ($20,000.00) within the next six months. I am 31 years old with a FICO score of 628, and my monthly net income is $2,400.00. My monthly bills are less than $1,000.00.

My goal is to raise my score at least 20-30 points before applying.  I plan to do so by continuing to pay timely on my student loans and applying for and paying timely on a credit card, as I have read that this is a good credit building mechanism.

IF I don't reach my goaled score:

1) Should I apply, and then refi in the next year if I am approved?

2) Would I be better off with a cosigner with low to mid 700's score?

3) Any suggestions on lenders?

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1) Yes apply at a few financial institutions, and refi rule of thumb is to do it when your score has any significant improvement regardless of timeframe.

2) First apply by yourself, and use the cosigner as backup if you don't get a decent rate that you can pay for a year or so.

3) I say credit unions are the way to go

4) At 20,000, consider buying a new car. Rates are better for new cars too

5) When you're ready to buy, read http://ficoforums.myfico.com/t5/Auto-Loans/How-to-buy-a-car-for-the-first-time-buyer/td-p/1923289

[Dustink]

5) When you're ready to buy, read http://ficoforums.myfico.com/t5/Auto-Loans/How-to-buy-a-car-for-the-first-time-buyer/td-p/1923289

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If you aren't inclined to do a lot of negotiating yourself. You can look into site like truecar, or the USAA car buying service. They guarantee you a decent price before you even walk in. Then you can negotiate more if you want. These sites will automatically put you in contact with the internet sales managers, which can be a helpful tool. Dealers that weren't too convenient offered some better pricing than the ones near my house, but the ones close by were able to match or beat their distant competitors pricing.

As the last poster mentioned in their link. Everything is negotiable.