Question for Sherbros who understand credit

I have done quite a bit of credit research over the last few years and if you want real answers this is not the forum. Check out Myfico.com and check out their "community". Lot of good info there that will get you steered in the right direction. You want a few different types of loans reported and paid on your history to make it better for you to get the best interest rate possible. Revolving, Installment (which is what a car loan is), and your regular credit cards.

There's a few tricks to maximizing your score such as keeping your cards below 10% of the total amount available. I have a $35k card that I use for everything I would buy with cash every month like groceries and gas and I pay on it weekly. This card started out at $8k and with these spending/paying habits has grown to what it is now in a year and a half. With an installment loan initially you take a hit but once you pay the balance down your credit steadily increases. Once you pay the loan off your credit again takes a minor hit but nothing like the initial hit.

I can't explain it all as well as its written over there on those forums. I can say that following the guidelines laid out over there has helped my credit substantially.
 
LiL CeeZ said:
I have done quite a bit of credit research over the last few years and if you want real answers this is not the forum. Check out Myfico.com and check out their "community". Lot of good info there that will get you steered in the right direction. You want a few different types of loans reported and paid on your history to make it better for you to get the best interest rate possible. Revolving, Installment (which is what a car loan is), and your regular credit cards.

There's a few tricks to maximizing your score such as keeping your cards below 10% of the total amount available. I have a $35k card that I use for everything I would buy with cash every month like groceries and gas and I pay on it weekly. This card started out at $8k and with these spending/paying habits has grown to what it is now in a year and a half. With an installment loan initially you take a hit but once you pay the balance down your credit steadily increases. Once you pay the loan off your credit again takes a minor hit but nothing like the initial hit.

I can't explain it all as well as its written over there on those forums. I can say that following the guidelines laid out over there has helped my credit substantially.
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I'll check it out. Thanks, dood.
 
Dinotective said:
My score is in a decent place, but I feel like if I tried to buy a house, they might look at my history and be like 'wtf'? you haven't even financed a car and you wanna get a house?
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Your score is fine. You can be a first time loaner with a bank. No need to have bought a car through a loan in the past. Credit history, equity, down payment, income, debt, and assets will all play into the decision. How much you need will also play into the equation. Also, look at different banks and what they offer. Remember, the bank is not doing you a favor, it will also make money in the transaction. It is looking for business.

Home Loans 101: http://blog.quizzle.com/2011/02/home-loans-101-what-you-need-to-qualify-for-a-mortgage-today/
 
Within 35% of the time frame of the loan.
 
Cid said:
Why would they do that? Not financing a car is a good thing. Why pay interest on something that depreciates...
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Because that cash can offer a better return elsewhere if he qualifies for a low APR.
 
Cubo de Sangre said:
Sounds like you're already good TS. Fuck paying interest if you don't have to.
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This isn't as black and white as you seem. TS can probably finance a new car for 3% or under. TS can take the cash he has available and invest it the surging stock market and come out ahead.

TS, why the hell do you have that much money just sitting around in checking/savings? You need some cash available but your money should be making you money, not just sitting around.
 
Cid said:
Honestly I probably know less. I don't even know my credit score. Never had a credit card.
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It's certainly your choice, but not knowing your credit score, not having good credit, is not a great move. It impacts more than your buying power, it impacts your car insurance rates, employment, etc.

You also leave money on the table. If you have a good credit score you can get credit cards with excellent rewards, including 4% cash back. All you have to do is pay your balance off each month and you come out ahead. It's a no-brainer.
 
Download credit karma. It breaks down your credit score into categories and shows you where and how you can improve your credit.

Car loan will help but I’d finance as little as possible with the shortest term. Go through a bank or credit union or online. Shop around for elowest rates.
 
One method of building credit without incurring huge interest is paying off ninety-five+ percent of the debt long before due, then keeping a paltry amount still on the hook. Interest on that will be low and tease it out for as long as you want.

But with a car you might want to lease instead of buy. Cars are a terrible value in the arena of finance.
 
Secret Agent said:
One method of building credit without incurring huge interest is paying off ninety-five+ percent of the debt long before due, then keeping a paltry amount still on the hook. Interest on that will be low and tease it out for as long as you want.

But with a car you might want to lease instead of buy. Cars are a terrible value in the arena of finance.
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4) Myth: You must carry a balance on your credit cards to build a credit history.

Fact: Credit cards are great tools for building your credit history, and you don’t need to carry an unpaid balance to do so. Your best strategy is to use your credit cards and pay off the bill in full each month, so you keep your overall debt-to-credit limit ratio low.

Source
 
pay a good amount in cash if you can. say, 50% if its nbd. Once that's paid, you'll notice a big jump in credit score. Talk to credit union about your finance options... might be better than the dealership. Checking credit twice in a day or two can bump you down just a little.
 
weich said:
4) Myth: You must carry a balance on your credit cards to build a credit history.

Fact: Credit cards are great tools for building your credit history, and you don’t need to carry an unpaid balance to do so. Your best strategy is to use your credit cards and pay off the bill in full each month, so you keep your overall debt-to-credit limit ratio low.

Source
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I agree with this strategy;I was just trying to stay within the parameters of the original premise.
 
Jack Reacheround said:
Honestly, I don't know how long you would have to do it for your score to improve. But if your score is in the mid 700s, you're already good to go on buying a house.
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That is not 100% true. I have a very very good credit rating and I was rejected by some lenders because I had not borrowed a large amount of money prior to the mortgage (got it from paying off my credit cards on time every time etc). I eventually did get it, but some lenders do not just look at your credit score.
 
sjon22 said:
That is not true. I have a very very good credit rating and I was rejected by some lenders because I had not borrowed a large amount of money prior to the mortgage (got it from paying off my credit cards on time every time etc). I eventually did get it, but some lenders do not just look at your credit score.
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Really. I never had that issue when I bought my first house and had never borrowed a lot of money. I did an FHA loan though so maybe that's expected? I don't know. Also, I don't know how anyone could possibly buy their first house these days without the FHA loan. Unless you inherit shitloads of money, who the fuck can save $20,000 or more for the down payment?
 
Jack Reacheround said:
Really. I never had that issue when I bought my first house and had never borrowed a lot of money. I did an FHA loan though so maybe that's expected? I don't know. Also, I don't know how anyone could possibly buy their first house these days without the FHA loan. Unless you inherit shitloads of money, who the fuck can save $20,000 or more for the down payment?
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Yea it was a strange situation. If i gave you all the detail you would be even more dumbfounded how they would not lend me the money but according to my broker it was due to that lol.

I eventually did get it, but the first 2 lenders rejected me as someone who was in their 30's with a steady job the past5+years and over 750 credit rating.
 
sjon22 said:
Yea it was a strange situation. If i gave you all the detail you would be even more dumbfounded how they would not lend me the money but according to my broker it was due to that lol.

I eventually did get it, but the first 2 lenders rejected me as someone who was in their 30's with a steady job the past5+years and over 750 credit rating.
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Was it an FHA loan?
 
If you are going to finance a car I would make sure the dealership knows this. Tell them you absolutely want to finance through XYZ credit union. I say credit union because they typically have the lower rates. If the dealership doesn’t know this they will use cudl(program to find best deal) that will hit you with 5+ inquires.

When you apply for a loan your credit score definitely matters but that’s not the only thing. Are you credit hungry? Opening a lot of accounts recently or lots of inquires. Have you had similar loan you were able to repay? If you have derogatory marks have you repaired them and what caused them?

Honestly, an auto loan may not help the score too much but it may help an unwritter decide to give you loan if
A. You have been making on time payments for an extended amount of time or
B. You have the ability to pay off a loan fully, stay committed.

At the end of the day it’s all about it the borrower is going to pay the lender back. So pay your pills on time!
 
weich said:
This isn't as black and white as you seem. TS can probably finance a new car for 3% or under. TS can take the cash he has available and invest it the surging stock market and come out ahead.

TS, why the hell do you have that much money just sitting around in checking/savings? You need some cash available but your money should be making you money, not just sitting around.
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Bird in the hand is worth two in the bush.
 
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