I have DILIGENTLY been working on my CR since about June of last year. I have worked my way down from owing over $20k to owing $1,111 EXACTLY (so proud of me
). The plan is to wait until I have finished up my SL rehabilitation and for that to show as no longer defaulted before I go looking to qualify for a CL. I have old medical bills which when incurred I had insurace, but now that I have asked for the agency to pay- they will not stating that it is too old (why they werent paid to begin with is beyond me
-my fault for not keeping up with my stuff). They are all due to fall off within the next 2 years, so IDK if I should pay them or what???
Anyway, in regards to the car loan, I have never bought a newer car, Ive always saved and paid cash. So this is all new to me. What would you all suggest as far as pre-approvals, paying the old medical bills and shopping for loans in general?
With credit scores that low, you will find it difficult, if not impossible to obtain financing without a co-signer. Especially since you have no auto loan history, any lender will be hisitent. Obviously getting any derogs cleaned up before will help (remember that paid and unpaid collections are scored the same), but be prepared to put a large down payment and find a co-signer.
Starting Score: 627 EQ, 621 TU - 11/15/08
@Anonymous wrote:I have DILIGENTLY been working on my CR since about June of last year. I have worked my way down from owing over $20k to owing $1,111 EXACTLY (so proud of me
Anyway, in regards to the car loan, I have never bought a newer car, Ive always saved and paid cash. So this is all new to me. What would you all suggest as far as pre-approvals, paying the old medical bills and shopping for loans in general?
You're almost debt free - why run it back up again? If you can put off buying a car for another year and save as much each month as you've been putting toward bills, you could just pay cash for a real nice used or even possibly a new car.
Couple of points on this thread:
FIrst, if you're trying to rebuild credit, you want an auto-loan. Doesn't matter how long, or how much, just get one.
Secondly, auto loans are arguably the easiest loan to obtain; they're secured, and if you can typically put enough cash down on a new or recently used car (your savings vis a vis paying your debt down clearly indicates you don't have an income problem) you can get financing with worse scores than you have. I'm living proof of that, financed with a 551 Auto EX pull. For that matter I got more than one approval too, so it's not like it was a random one-off fly-by-night place: mine reports to all three bureaus from a bank everyone's heard of.
The salient details: my income doesn't suck, my outstanding debt was near zero, and I had 30% to put down. Even the Wells Fargo rep stated it baldly: I guess I have twelve thousand reasons to approve you: and it was as simple as that.
To re-iterate, auto loans are secured debt, there's always someone willing to cut a deal on financing (even if the rate may be ugly), as the simple fact is as you continue to improve your credit score, and the auto-loan is non-trivial for that, you can refinance that nasty APR away in six months to a year depending what your credit profile looks at that time. Then do it again another year out for the same reasons if you haven't already paid it off.
End of the day, if you put enough down, your sins may not be forgiven, but they'll be ignored by lenders. Why not? 1/3 downpayment = flake anytime in the first three or so years and they repo the car and make profit on it at auction assuming a new car. It's not hard math for any lender to do.
Revelate....youre a breath of fresh air
! I knew that Id be given a loan and at higher interest rates and Im ok with that. I have about 5k to put down and I know a couple people who had less than $300 DP, whos scores are lower than mine- one of which walked off the lot with a 2012!!! I also agree that in order to rebuild my credit, this loan one that wont be frivolous and WONT go into default. Ive learned my lesson and I refuse to be as irresponsible as I have been in the past
You'll be fine 
You've already made a solid improvement in your scores, and the auto loan will continue to help there as well. Like you I've been irresponsible in the past (massive tax lien, oi vey), and now am in the process of jumping up and down on my shoulders to yank my head out of my tookus.
It's a long process, but responsible use of credit / financing is the ladder we're stuck climbing, so yeah, suck up the APR in the short term as we're not stuck with it forever. In my case I picked up a used car at 19% APR, but I have money to throw at it and I know there will be someone willing to re-fi it down after six payments are made in my case. On a new car, you can probably wind up doing better than that depending how badly the dealer wants to move their cars. Just pick what you like, with a payment you can afford, ignore the term altogether (six, seven years, who cares) as re-financing should be in your plans unless you get a spectacular rate from the start.