Credit score question...

[CMJustice26]

Looking to buy a car in the next few months and I've been preparing for it for a while.

1.)  Paid off all credit cards a few weeks ago, and waiting to see what happens to my score when they show up as zero balances. Should I leave a balance on one card? Will 0s across the board hurt my score?  I wasn't carrying a ton of debt before--- 80/20 overall, is it even going to make a difference?

2.) I recently consolidated all my student loans from law school, because I now have a gov't job and because it's a "public service" job, whatever isn't paid after 10 years will be forgiven. Even though I'd been paying on the loans for almost two years, my score took a little ding (5ish points maybe?) when they were consolidated. Everything was gov't loans before, now it's a gov't consolodated loan. I consolidated in November, but they've lost my paperwork for payment info twice now, so I'm sitting in forebearance til they get it all straightened out. It should be figured out shortly since I sent the last round of paperwork certified mail with my work address (with the Attorney General) as the return address.  Anyway, I think it's hurting my score because it's a new account with no payment history, even though it's the same loans, same lender as before. Am I right? How long will it take to even things back out once I start making payments on it?

3.) What's a good score to shoot for to get decent auto rates?  I'm pretty stagnant around 685ish EQ FICO.  Fingers crossed for crossing the 700 threshold when the above two issues straighten themselves out.  Will it make a difference? Anything else I can do to boost my score a few points in the short term?

TIA for any help/advice anyone can offer!

[IOBA]

1) Paying off the debt before applying for a car loan is a good thing.  Score should increase.

2)  Having an inquiry (for the loan consolidation) as well as adding a new account (loan consolidation) hurts the score a little bit, but not too much.

3)  Not sure what a good rate would be.  My CU offers as low as 2.99% on a loan and they require FICO scores around 700+.  If you have a CU, go ask them.  If you are with a bank, consider asking them.  In general, CU's can offer better deals.

I would venture, with zero debt, and a credit score high 600's, you should NOT be double digits for interest rates.

Good luck!

[Peach8321]

Welcome - stick around and you'll know more than you thought possible about a FICO score!  As mentioned, paying cards off is good - there have been comments that some of the companies like to see one card reporting (like 1%) but in general, pay them off and you will be fine.  And yes, even if it was 20%, going to 0% can make a difference!

When you "consolidate", you open a new tradeline so you will take a "hit" in points for that and before you apply for a car loan I would suggest paying a couple of months on the new loans to show you will pay on time.  Things should even out within 3 months in that you will start showing payment history (A good thing).  As far as AAOA, you will have decreased a bit, since your new line will be 3 months old, compared to whenever you originally received the loans.  Also, a hard inq was probably used to consolidate so that will bring things down a bit - but again, within a few months you should see some rise although a full year or two is best to totally smooth out the hard inq.

As suggested, check your credit union (if you work for the government, there are several nice ones) for the best rates.  In general, cars are more forgiving than houses for lower scores for a loan but 700+ is always a good number to shoot for.  As long as you pay the cards off and start paying the loan (for around 3 months) your scores should rise - if you can't wait 3 months, a credit union is most surely going to give the best rate for a "lower" score.  

Finally, make sure you can bring a good downpayment to the table for the car - a higher downpayment can be favorable when you don't have the highest scores, since they are taking on less risk.

(Also, if I may suggest: get a used car for your first one - you lose too much on a new car driving it off the lot that a loan can be underwater right away compared to a used car.)

good luck and feel free to look around and ask for more advice as needed!

[CMJustice26]

Bought my first car on Friday! Transunion FICO pulled by Nissan was 720, tier one!   After some tugging and pulling, qualified for the "well qualified" rate even though I'd never had an auto loan. I looked at used cars too, but really couldn't justify the half-used warranty and jumbo interest rate for used when I was able to finance at 1.9% new. I'm ecstatic, though I think I need a new credit coal for mortgage shopping after I rebuild my savings.  Thanks everyone for the input and advice.

[veracious]

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@CMJustice26 wrote:

Bought my first car on Friday! Transunion FICO pulled by Nissan was 720, tier one!   After some tugging and pulling, qualified for the "well qualified" rate even though I'd never had an auto loan. I looked at used cars too, but really couldn't justify the half-used warranty and jumbo interest rate for used when I was able to finance at 1.9% new. I'm ecstatic, though I think I need a new credit coal for mortgage shopping after I rebuild my savings.  Thanks everyone for the input and advice.

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Congrats!!! on the new car loan!

Sounds like youhad a good experience negotiating with  "car salesmen".

Good luck and happy driving