About to buy a car and considering financing if it will help credit ??

[Anonymous]

Hello,

I am about to purchase a used vehicle in the 10-15k range. My credit score is right at or just above 700 (700-710), and I am considering financing it or some of it, especially if it will improve my credit more quickly for a home I am looking to buy a in 9-12months.

I have credit cards that are paid off monthly as well as a mortgage that I'd paid monthly. I have never had a car or auto loan of any type at any point in my life. Would financing some of this vehicle likely help raise my score more quickly in the next 9months with perfect payments?

Suggestions are appreciated.

[simplegirl]

If you already have a installment loan it probably won’t make much of a difference. Also I see people say you should not get anything 12 months before you get a mortgage.

[Anonymous]

If you have a mortgage already... then you already have an installment loan. 

If you didn't then yes it could be a 30 point gain but, hacking away at your AAOA before a mortgage app isn't a great idea if you don't have to.

To get more pop for your mortgage scores look into AZEO as the less accounts that have a balance garner a higher score.  however, don't pay off everything because it will sink like a rock.

[Anonymous]

Make sure if you do go this route that you don’t take financing from the dealer. Secure financing with a bank or CU. Many dealer finance companies like Honda and Toyota code on credit reports as a consumer finance account which is a black mark on mortgage and auto scores. 

[Anonymous]

Acquiring an auto loan now will do more harm than good if you're 9-12 months away from another mortgage, both in terms of Fico scores and in terms of a MR that would no doubt be done at the time of the mortgage.

[SouthJamaica]

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@Anonymous wrote:
Hello,

I am about to purchase a used vehicle in the 10-15k range. My credit score is right at or just above 700 (700-710), and I am considering financing it or some of it, especially if it will improve my credit more quickly for a home I am looking to buy a in 9-12months.

I have credit cards that are paid off monthly as well as a mortgage that I'd paid monthly. I have never had a car or auto loan of any type at any point in my life. Would financing some of this vehicle likely help raise my score more quickly in the next 9months with perfect payments?

Suggestions are appreciated.

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It won't help your mortgage scores at all. It might hurt them.

The best thing you could do now is NOT apply for any new credit until after the mortgage is obtained.