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New to credit/financing and just bought a car at 20%apr. Looking for some advice

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New to credit/financing and just bought a car at 20%apr. Looking for some advice

My wife and I were just put in a situation where we needed to get another car as our old one was just having too much problems. She has absolutely no credit established. I had some stuff on my credit over from 7-12 years ago, my experian credit report still showed a 0 because I have had no established credit for a long time.

 

We made the purchase of the car we were looking for. we had 3500 down and after all the fees and such, our total financing was just over 12,000. The thing that sucks is we have a 20% apr. At 330 a month, we would pay an extra 7,000+ in finance charges Smiley Sad
With us having 0 credit, could we have realistically received a better deal than this?

Now of course we are not looking to have this rate for the whole term. What would be the best way to be able to refinance? Unfortunately with everything going on I didn't get to talk to the financial guy about this, but is the option the refinance always going to be an option for me? Like they can't say "oh you have to stay in these terms for at least 2 years because its in your contract"? I am working straight with the toyota dealership.

 

Should I still continue to apply for auto loans? I applied to our banks and other credit unions already prior to obtaining the car and have currently have 7 hard inquiries. Even though my score is still 0, will it hurt me to try to keep applying to obtain a loan for a better rate, or should I wait 6-9 months to get an actual score?

Speaking of hard inquiries, I know I'm being financed through toyota. But upon checking my report, I was told that I obtained 2 additional hard inquiries on my name from other places I was not familiar with the same time I got approved from toyota. Can they make inquiries from other compaines on my behalf? I don't believe I ever gave them the ok to do that nor did they inform me they were going to run my credit with other companies.

Any advice would greatly be appreciated!

 

p.s. I found out that I have an emergency room hospital bill for $299 from 4 years ago. If i decide not to pay this off, will this drastically affect my credit? yes that's like another car payment Smiley Sad

Message 1 of 3
2 REPLIES 2
Valued Contributor

Re: New to credit/financing and just bought a car at 20%apr. Looking for some advice

Welcome to myFICO.

 

I would recommend you do not apply for any additional auto loans. If all the credit inquiries were around the same time for auto financing they will often score as 1 HP (hard pull). All of the inquiries will appear on the report.

 

Financing through Toyota is good, that will report to all the credit bureaus.

 

In time you will be able to refinance the car at a reasonable interest rate but it will take time.

 

I imagine you belong to a bank or credit union. If so contact them and see if you can get a secured credit card. Basically you put $500 in an account and they issue a credit card with a limit of $500. The benefit is from reporting a positive tradeline on the credit bureaus.

 

Others will be along to offer advice. Number one is make every payment on-time!

Message 2 of 3
Established Contributor

Re: New to credit/financing and just bought a car at 20%apr. Looking for some advice


@Kramos83 wrote:

My wife and I were just put in a situation where we needed to get another car as our old one was just having too much problems. She has absolutely no credit established. I had some stuff on my credit over from 7-12 years ago, my experian credit report still showed a 0 because I have had no established credit for a long time.

 

We made the purchase of the car we were looking for. we had 3500 down and after all the fees and such, our total financing was just over 12,000. The thing that sucks is we have a 20% apr. At 330 a month, we would pay an extra 7,000+ in finance charges Smiley Sad
With us having 0 credit, could we have realistically received a better deal than this?

Now of course we are not looking to have this rate for the whole term. What would be the best way to be able to refinance? Unfortunately with everything going on I didn't get to talk to the financial guy about this, but is the option the refinance always going to be an option for me? Like they can't say "oh you have to stay in these terms for at least 2 years because its in your contract"? I am working straight with the toyota dealership.

 

Should I still continue to apply for auto loans? I applied to our banks and other credit unions already prior to obtaining the car and have currently have 7 hard inquiries. Even though my score is still 0, will it hurt me to try to keep applying to obtain a loan for a better rate, or should I wait 6-9 months to get an actual score?

Speaking of hard inquiries, I know I'm being financed through toyota. But upon checking my report, I was told that I obtained 2 additional hard inquiries on my name from other places I was not familiar with the same time I got approved from toyota. Can they make inquiries from other compaines on my behalf? I don't believe I ever gave them the ok to do that nor did they inform me they were going to run my credit with other companies.

Any advice would greatly be appreciated!

 

p.s. I found out that I have an emergency room hospital bill for $299 from 4 years ago. If i decide not to pay this off, will this drastically affect my credit? yes that's like another car payment Smiley Sad


For loan amount interest is high. Would suggest getting some credit cards and building a healthy file and ought even be able to refi at a much better rate 6 months later. Since wife have no credit at all should be easier and faster to build her score up. If the new car loan u just got have her on it too would be even better

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