How much will a trade in for a new car hurt my score?
Asking a question for a friend.
His scores are TU 707, EQ 656, and EX 678
His auto score should be hiring since he has had 4 cars in his name, at separate times,all paid off including a $38,000 Lancer Evolution IX loan.
He currently makes 60k a year. Has never missed a payment but has a couple houses under his name and a couple cars. His credit score is mainly hurt because of the length of credit. (4 years, he's only 22.)
His current loan is a 2007 Honda Civic which he wants to trade in for a 2009 Hyundai Sonota.
Please leave the don't buy a new car arguments out of this thread please =]
He is also applying for a business loan in 2 months in which they said if his scores stay the same, he will be approved.
The question is, how much will his credit score drop in 2 months if he trades in the Civic (which will be paid off) and gets the Sonota? The total loan amount after the trade in and purchase of the new car will be around 20k.
I personally think he should just wait til after he gets the business loan approved, but am looking for more insight from my fellow board members.
Thank you for the help in Advance.
6/18/08 TU 707 * EQ 732 * EX 728 9/27/08 TU 718 * EQ 735 * EX 738
Re: How much will a trade in for a new car hurt my score?
Makes no sense in getting a new car loan if he wants to turn around and get a business loan 2 months later, given all factors.
His credit will take the hit for the inq and dropping his avg. age of credit. Then it will take a month after he gets the loan for the new trade line to post (hopefully) and then another month for his first payment to hit (again hopefully). Looks like this is not a smart move.