I recently had to bite the bullet and attempt to get a newer used car. My old one is going on 15 years old and has been in 2 accidents and is probably not going to last more thna another year or 2. Needless to say a 2 color crunchy car is not what I wanted to bring my newborn home in this summer (due July4th)!
So I took a dive into autosolutions.com to see what they had and thought i'd just go for something btw 6-7k and be happy with it, knowing it was safer/better/newer car. My hubby ended up talking us into a 2004 VW Passat wagon with lots of luxeries I've never dreamed of having in a car of my own. So, thinking I wouldn't be approved for a loan for the price of the VW (10,800), I tried my luck and had given up in my mind before getting an answer back. I knew what I could manage for payments - I'd done some number crunching for that and for the additional insurance (sorry this is long winded). So imagine my surprize (I turned redder than a fire hydrant and almost fell on the floor) when they came back telling me I was approved with only $200 down!
So the situation is this: My experian score is currently 672, I had around 13% debt ratio before the loan, and only 3 med bills in collections when I got the loan (apparently they aren't a large factor in getting an auto loan??). I'm working on finding the "teal" pen to get the hippa paperwork sent in...anyways I digress. All my other accounts are current and in positive standing, if not a long history (less than 3 years). I had a personal loan I payed off in half the time of the origional contract, but its still posting as a closed positive account (I wonder how long it will stay on my report?).
My work history is good, I've been at my job for almost 9 years now. So I assume my debt/credit ratio with go way up (the total loan is for almost 14k after all taxes and fees)! Will this mean my score will take a dive for a while? I expect it to, but how long do i have to make on-time payments for it to go back up again? And if I pay extra on principal and manage to pay the auto loan off sooner, will than brighten my score considerably? How long do I have to wait? I look forward to diversifying my credit portfolio this way, and glad I am able to - i just would like an idea of what to expect for the next year or so. I hope to pay this off in like 2 1/2 years rather than 5 or more! If you read my book, thanks for taking the time, and any feedback would be great!
