HOW WILL PURCHASING A NEW CAR AFFECT MY CREDIT SCORE AND FUTURE HOME PURCHASE.

[BLESS]

I currently have a 651 fico score and plan to purchase my first home in the next 6 to 9 months. I would like to purchase a new or used car no more than $15,000. I would like to know if this will affect my credit score and ultimately hurt my chances at purchasing a new home. I currently have 2 credit cards that total 1400 credit limit. These credit cards have a zero balance. I have 24000 that I owe in student loans that are currently in grace and payments will start in October/2012 with a 50 dollar monthly payment. Should I purchase a new or used car? Please advise.

[thrillege]

It will help it. Not hurt it. They like to see some Installment loans.

[creditnocash]

it will hurt (inquriy and new account/drops aaoa) at first but over time it will help it. 

and yes they always say they like variety in your reports. 

[Shogun]

You'll actually drop at first.  Take somethings into consideration.  First it will add an inquiry.  This may or may not affect your score.  Second it will bring down you AAoA, might not be too much, but some drop.  Then it will also figure into your DTI when time to get your mortgage.  After a time, it will actually help your score as it will give you another TL.  But be prepared for the inital drop before it goes up.

[rckstrscott]

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@BLESS wrote:

I currently have a 651 fico score and plan to purchase my first home in the next 6 to 9 months. I would like to purchase a new or used car no more than $15,000. I would like to know if this will affect my credit score and ultimately hurt my chances at purchasing a new home. I currently have 2 credit cards that total 1400 credit limit. These credit cards have a zero balance. I have 24000 that I owe in student loans that are currently in grace and payments will start in October/2012 with a 50 dollar monthly payment. Should I purchase a new or used car? Please advise.

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Well, my LO advised me not to get any new accounts within 6 months of purchase. Although, a letter of explanation will likely all you need.

Couple points:

Although when shopping for cars all inquiries are scored as 1, they will still all show, and they will all have to be explained to the lender.

You're student loans already will be considered in your DTI. Do you really want to add 250+ a month to that? It will reduce the home purchase price you can be approved for as well.

How new are those credit cards?

-scott

[BLESS]

My credit cards are 13 months old

[BLESS]

Do you know roughly how long it will take for my score to go back up?

[tooleman694]

It all depends on what kind of a hit you will get from AAOAs.

If you have a thin file with a long history, it could take a while to recover. But if you have a thin file with a short history you probably wont see much of a score change.

[webhopper]

It will hurt your debt to income ratio and will affect how much house you can buy. I think you should get a car after the house.

[StartingOver10]

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@webhopper wrote:
It will hurt your debt to income ratio and will affect how much house you can buy. I think you should get a car after the house.

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^^^^this above. I see car loans kill real estate purchases all the time.