I am trying to build credit so that my husband and I can get a homeloan. I am used to live within my means and to save until I can afford to buy what I need. I have enough money to buy a car in cash. But would it be better to finance it and pay it off immediately? Or would I have to pay off the entire loan (incl. interest) in order to boost my credit rating?\nAre there any other better ways for me to use my savings as an advantage in building credit?\nThanks for your input!!!
122328
Kat,\n\nYou leave out some important details.  \n\nI'm going to assume from your comment that you don't have credit right now because you purchase everything in cash, right?  I did that when I was young.  Paid cash for my car and did't have a card.  Had $20,000 in the bank to put down for a mortgage.  They wanted to refuse my loan because I didn't have a credit history!  Lucky for me, they had a loan manager who had sense enough to look beyond a credit report.\n\nWhat about your husband?  Does he have a credit history?  Good or bad credit?  Remember that they will be looking at his score also if you both plan to be on the loan.  If he has good credit you may not even have a problem.\n\nAs the others mentioned, you need to build a credit history.   How long from the time you buy this car on credit, until you start looking for a home?  Credit Guru is correct, it won't help you much to pay it off immediately.\n\nHaving a big down payment for the home may impress the mortgage company into giving you the loan without an impressive credit score.  Worked for me.\n\nIf you really need the car right now, consider paying it off in cash when you buy it. Many car dealers will cut you a very good price if you are paying up front.\n\nBefore you go any futher, go to the link I supplied below. You are trying toimprove your credit score, so you need to understand exactly how they calculate it.  MYFICO is the folks to developed the scoring system, and their site has lots of information on establishing and improving your score.\n\nAfter your have educated yourself you can make better decisions on how you can proceed.\n\nI sure wish I had your problems. Wanna trade?
446156
Having anything in your name will help.  Cell phone, car payment, car gas card, but if you really want to build credit you need to get a credit card.  Go to your bank and ask about a "student visa" card.  Those usualy only have a $500 limit, so you can't really get into to much trouble with it.  And then just put like $50 a month on it and always pay it off.  That is how I started, and I have great credit!
241550
You each have your own distinct credit ratings.  They will not combine unless you get joint loans.\n\nYou can actually use this to your advantage.  If you husband has good income, use your good credit to help him build his score back up.  Co-sign for a card or loan under his name, and keep up the payments. \n\nWhen I got married, my wife came with "baggage" from her previous marriage and had terrible credit.  I had a good job and excellent credit, so I co-signed on a couple cards, and co-signed for a car in her name.  Now her credit is super!  Took a couple years but it worked, and was totally painless.\n\nJust keep up your payments.
559103
As you make purchases, and make your monthly payments\nON TIME, you will automatically qualify for limit increases. If a year has passed, and your account has been kept in good standing, you can also request a limit increase. Keep in mind, if your goal is to stay out of debt, increasing your credit limits does not sound like a good idea. The fastest way to improve your credit score is with an installment loan, like an auto loan or mortgage. You get a lot more points for paying this type of loan on time than you do revolving, or credit card accounts. Any other questions in this area, feel free to contact me.
413324
look around for these car lots that say we finance right here right now..\na lot do this,\nbut you may get a better rate as long as your credit is good, but tell them you just want to fiance through them,\nor go to a CREDIT UNION not a bank and talk to them for a car loan, they usually only require you open a bank account with them and this way it can even be taken right out of your check if you want it to. this makes it much better for them to give you the loan\n\ngood luck\nsmile
14406
Most financial institutions these days have what they call "second chance" loans especially for those who have bankruptcy on their credit. If thats the only blemish on your hurt credit report then chances are they may be able to help. It is at a much higher interest rate but it is worth it to rebuild your credit and oh ya, by the way here is a tip for ya. If and when you do get a loan, pay the payments and take a long time to pay them off.\nYou see, the issue here is not that you paid in full but that you can show a good and faithful payment history. If they begin to see faithfull payments regularly then it out does the bankrupsy. most people make the mistake of paying something off too early and it shows a lack of payment history. So the best thing to do is stretch those payments out as long as possible so you can develope and good long payment history. It'l help especially if you ever go to buy a home.
64910
Well, I'm your age and did both. In truth, after I payed off the house completely, I saved for a few months and bought the sports car. It was an amazing feeling knowing I owned the house outright. Then you still have time for the car! And when you're ready.......man do I have advice about which car to buy......lol!! Good luck :)
224729
First of all, they will find your car sooner or later.\n\nSecondly, and more importantly, it will affect your credit negatively for at least 7, possibly 10 years. This means you won't be able to buy a house, another car, get a credit card or student loans. \n\nFrom there, if you clean up your act enough to get credit again someday, you will pay interest rates that are double or possibly triple what some consumers pay.\n\nIs it really worth it?
646967
Get a co-signer with a good credit score. If that isn't possible use a company like American Finance or something equal to that, they are usually loan only businesses and not banks. Most of them make their money from 3rd party loans like when your local furniture stores says "No money down no payments until 2007" it is done through these little loan only businesses. Your interest rate may be close to 20% but you are more likely to get a loan if you can prove your income and their requirements on credit scores are much lower. Another long term alternative is to take out a small loan with a bank, not use the money and pay it back over 2 or 3 payments (months). Yet another option is to join a local credit union; credit unions give loans easier and if you have a co-signer who belongs to the same credit union there shouldn't be a problem. Remember most credit unions do not report anything to the Credit Companies unless you default or stop paying so being in good standing with your local credit union won't help your credit score. You can also offer to have the payments directly taken from your paycheck... this is sometimes very helpful if you have been at the same job over a long period.
115394
If you are going to use the laptop to make money, and you will make more money than the monthly installments, then go for it the monthly way.\nOtherwise, its not a wise business decision to buy it on credit. Perhaps it's more of a toy. \nIf that's the case, then buy it cash.\nNEVER NEVER NEVER take credit that won't leave you better off (for example, it's ok to buy a house on credit, as long as you save the rent, but its NOT OKAY to take credit to buy groceries because the next month you will be worse off)
244598
Well, to be honest with you your best bet would be to put the money in the bank that you plan on paying the credit cards off with. Each month you can pay over the monthly limit, but make sure you make your payments on time. By just paying off your debt it's not going to really help your credit score. They want to see someone who has really established themselves and has a good reputation. You might be able to get a loan anyway, but I will advise it might not be the best nor the cheapest interest rate. These are definite things to keep in mind.\nIf you do these things it will help your credit score, and you will be building a good reputation for your credit. This will also cause your credit score to go up. Once you have established good credit again, you will be able to get the loan you want and deserve. Hey we all fall into some bad times. So you aren't a bad person!! Just get back up on your feet, and move on. Life throws us curves and sometimes we have to duck, sometimes we have to tread through! \nMy suggestion to you would be to go to the websites I have pasted below. It explains what is a credit score, how do I get my credit score up. \nGood Luck, I hope this helps!
652138
YES, this is very true. My ex-bf was in the same situation. By accepting an auto loan and paying your car notes on time one can improve his or her credit score. But please take note that the dealership probably offered what is called a "Bad Credit Loan". A bad credit loan goes on your credit report. It can either help you or hurt you. If you default on a loan such as this one, it is reported to 3 major credit bureaus immediately i.e. if you take the loan and miss payments-- WATCH OUT! Furthermore, you then may have to file bankruptcy on the real. Also, if you happen to file bankruptcy it may hurt your chance of getting a loan in the future but you can get some "bad credit credit cards" out of the deal. Good luck, I hope I've helped you.
556177
What if your husband could put some more hours in to support you while you attended school? Also, you mentioned on another page you work with credit, so I'm sure you could find ways to obtain a loan during that time. Final option: downsize. Too many people voluntarily join the "rat race" with their monthly payments on a nice car, nice house, and other items that aren't necessary.
386051
they have those secured credit cards, where you put up a savings account and they give you that amount in credit. It shows on your credit report as a credit, so you build credit that way.\nhttp://www.bankrate.com/brm/news/cc/19990823.asp
481373
Hi there. Generally speaking your FICO score is between 300-850 with 620 being considered good enough to get a lower interest rate. Different sources score somewhat differently. When buying a car do not settle for the sticker price. Try to get 1-2 thousand knocked off. If at all possible, try to finance for no more than 2 years. This is difficult for most people. By doing so you will save thousands in interest on the loan. Do not tell the dealer how much money you have as a down payment initially. Mention that there is another car at another dealership that has offered you a better deal. (Sometimes it's just a game of BS) and I don't know why. It's just a matter of how high a profit the dealer makes.Don't be discouraged. If they won't budge, go somewhere else. Try to dress nice. It seems to make a difference on how you are treated. Good luck and never let them pressure you into any deal you are not comfortable with.
472165
It depends on your financial goals.  If debt reduction is important, then yes pay off the loan.  To "get ahead" financially speaking, pay the car loan off, and take the same loan back out for investment purposes.  If done right the loan is now tax-deductible.  Every payment the loan will be going down, and your investments will be going up.  This is also a good way if you don't have the discipline to save on your own.  Do not do this without talking to a financial planner though.
268354
Extra points to you for thinking AHEAD.  Most people destroy their credit, then think about paying down the debt.\n\nIt would have helped greatly if you had been more detailed in describing your situation.\n\nFirst, can you make minimum payments to keep afloat?  18% isn't fun, but that avoids the credit catestrophy issues, at least.\n\nSecond, what do you have equity in?  A house?  A car?  Obviously a 401k.  Make a list of everything worth over $500.  Can you get a loan against one of these assets?  Consider approaching family and friends and ask them for a short-term (1-2 yrs) loan secured against something, preferably.  I've seen people get unsecured (small 1-3k) loans from family.  I've done a lot of these.  Write them up, be professional about protecting your family/friend who has probably not enthusiastically become an "investor."  Take care of them.  In the future, after you pay them off, they'll remember your integrity is solid.\n\nBottom line, you appear to have assets.  They appear to be illiquid.  Your mission, should you choose to accept, is to find a way to loan against one of those assets to create some cash.\n\nIn writing this answer, it's become clearer my reaction to your paying off your credit card debt.  BE VERY CAREFUL.  I've loaned a lot of money to people who get into have-assets-but-no-liquidity situations (except with much larger numbers).  Because if you get a loan, and spend all of your cash to payoff your credit cards, then you're almost back to the same situation again:  no cash.  This is an incredibly dangerous place to be since you can not make minimum payments on most bills - rent/mortgage, property taxes, car payments, electric bills, etc.  Being even a few days late could wack 120 points or more off your credit (I watched this happen 2 weeks ago).\n\nLet's assume you are getting unemployment that will cover basic living expenses, ie you have cash coming in from the gov't for at least awhile.  If then the only problem is that your credit card is at 18-24%, then yes, it probably makes some sense to borrow at 8-10% from family/friends and pay off most or all of the debt.\n\nAfter you borrow the money and get ready to spend it, Beware.  It is unlikely you will get too many chances to get this right.  Once it's spent, it's hard to get back.\n\nI would be VERY comfortable with my cash situation before paying off credit cards.\n\nAnother alternative is to get a credit card that will give you 0% APR for 6-12 months.  It'll ding your credit about 12-15 points, which shouldn't kill you, but more importantly, it'll save interest.  At this point, you then have another credit card, which if you're wise will simply be for emergencies.\n\nFeel free to email me with any questions,  Good luck,\n\nJared\n- - - ADDED AFTER I RECEIVED EMAIL WITH MORE INFOMATION - -\n\nI had another idea that might make more sense for you.\n\nInstead of pulling the money directly, which will incur something on the scale of 38%+ penalty (THAT's a wicked interest rate), you should see if you can borrow money from your 401k.  It's estimated 75-90% of 401k plans qualify for this "loan"-feature.\n\nBasically, you withdraw up to 50% (or 50k, whichever is lesser) of your 401k.  You may have to state that doing this helps prevent you from losing your home.  You then repay the loan/yourself over a 5 year period and you repay yourself with interest.\n\nAssuming that your employer's 401k allows for loans, this makes much more sense.\n\nYour current scenario:  38% penalty * 30k= 11.4k to the government, leaving you with only 18.6k.  Which means you have to withdraw much more to pay off the credit cards.  You have to withdraw $48,400 (less 38% penalty) to have 30k left for credit cards.  Too payoff your credit cards, you'll lose $18,400 in penalties/taxes.\n\nLoan scenario:\nIf you need 25k, take out 30k.  Charge yourself 8% interest.  Use the left ov