Hi, I'm new and have been lurking for a while, gotten some great tips from everyone here! I recently financed a car, after a truly mortifying experience finding financing. I have 3 cc's, each with a $500 limit, a few medical collections waiting to fall off (including one I'm disputing) and 'limited credit experience'. Got denied almost everywhere I went. I did find a CU for financing, but was approved for 15.75%. It was either that or Honda at 20something%. I was told refinancing in 8-12 months was the way to go but was wondering if it's possible sooner, maybe in the 6 month range? I plan on paying extra each month towards my loan because I know it goes directly towards the principal.
Also, how long does it take for the lender inquiries to fall off?
The inquiries fall off after two years but stop affecting the score after one year.
I wonder how much of a difference two months make? I refi'ed after 8 months because that happened to be when a loan sale was going on and I could get a great rate. Maybe you could talk to someone at the CU in 6 months. Bring a credit report/scores and ask if they will refi and what rate you would get, without having them pull your score so you won't be dinged if they can't help.
I refinanced after 6 months. I went from 10.35 to 4.15 after six months and reduced the total amount of the loan by $8,500 (that's the excess interest I would have paid). IMO, the savings was worth the 3-5 points my score temporarily suffered shopping for interest rates. I recovered those points by lowering my cc utilization.
Every transaction is going to be different. I was upside down on my loan and had to pay down the difference to refinance. For me, the savings in the total cost of the loan was the motivating factor. I also reduced the monthly payment and the term of the loan (by six months).