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Optimizing Score For Car Purchase

Frequent Contributor

Optimizing Score For Car Purchase

Hello all! I need to buy a new vehicle within the next 6 months. I have held off for a while to save money and because my credit is currently recovering from a financial meltdown I had a couple of years ago in 2016. I need some help on optimizing my score for purchasing the car. Obviously, I am disputing and working on negative items right now. TU is my cleanest report with only 2 baddies that are unpaid credit cards that have charged off. I am currently settling one of these, so I think it should be reporting as paid by the time I apply for the car.

Anyway, my TU score is sitting around 650. I have some high CC utilization right now, but that will be taken care of over about 2 months. I also owe on my current car about $3,700 as of right now (original balance was $15k), with a monthly payment of $400. If I continue paying regular payments, I would not be done until April 2020. My timeline for this car is about September or October.

Should I pay off this car now or just continue making regular payments? On one hand, I’ll look better financially if the car is paid off because my DTI ratio will go down. On the other hand, many people report their scores going down when they pay off a car. I have several paid off never late car loans on my report, so I have a good auto loan history. I just need to get my score as high as possible in order to get a lower rate. I’m looking to spend about $28k on this car (hubby and I currently share the car I already have) so I know this will be a bit of a challenge with any derogatories reporting. Thanks in advance for any suggestions you all can provide.

Re: Optimizing Score For Car Purchase

well if you have too many loans out now, you're considered a high risk.

How old are those negatives?

After three years it's easy to get an auto loan, even after filing chapter 7 but before that, it gets more diffcult.

Either way, the longer you wait the better loan you get.

Having a good down payment will help as well.

Keep in mind, approval also depends on the amount of the vehicle.




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