Question:
I know I could get my credit score but it costs money and many of you are knowledgeable enough to help me out for free!
I'm only 19 but I want to get a car loan soon. I am wondering how bad off my credit is - I know it isn't good. Here's my history, in order of how it happened:
* I applied for and was denied a Gap card.
* I applied for and was approved for a Bank of America student credit card. I had a $500 limit. I carried a $200-350 balance for about four months. I paid the minimum or more on time every month. Then I paid it completely off with two payments and cancelled it shortly thereafter.
* I opened an Ann Taylor Loft card with a $700 limit. I have carried a $200-300 balance since then. I pay at least double the minimum on time every month. I recently cut up the card but I am continuing to pay down my balance.
* I opened a Gap card with a $300 limit. I carry a $200-300 balance on it. I pay at least double the minimum every month. I still use this card on occasion.
Answers:
I work for an auto finance company. Your credit is fine. It is what we call a thin file. It describes new credit or a someone who has less than three years of history on the credit bureau. You might not necessarily need someone to go on the loan with you to get approved but it would help your intrest rate out plenty. Also put as much down as possible. Lenders who buy thin file deals like to see a low "loan to value" or LTV. It makes the loan less risky and can often help your rate.
Just make sure when getting into an auto loan that you are comfortable making the payments each month. On 10K this wil be around $200 - $250 depending on your rate. Remember, you also have to pay for insurance every month and gas. Shop insurance rate on the type of car you want to buy before signing anything at the dealer. Sometimes adding in another $100 a month for insurance and $100 in gas can start to squeeze your budget.
I don't want to sound like a parent, but I see too many people ruining their credit by getting into cars they can't afford because the dealer sells them a car which is too expensive and shoves a high intrest rate loan down their throat.
Your credit should be pretty good. What might nto be good is your credit to debt ratio. You simply may not make enough money to qualify for more credit, even though your numbers are good.
Sounds like you have good credit but because you're a first time buyer they're probably going to ask for a co-signer if the loan amount on your car is going to be too big.
You should never cancel credit cards. The longer you have credit with each company, the better your credit score will be. You might need to get a co-signer for your car. I had credit for only a year when I tried to lease my first car and I was told that it was good credit, but that my history wasn't long enough.
Honestly... you should have kept the Citibank card... even if you did not use it.
A major Credit Card in positive standing is a strong trade line for your report.
You certainly dont have BAD credit... you just dont have any established credit.
You really should just save up and pay cash for your car... debt is dumb... dont be slave to a car payment if you can avoid it... sometimes you cant.
Dont buy a new car, and dont pay more then 10k or so for your car.
You should expect to pay around 10% for your used car loan... which is not terrible... you should go to a credit union, they will most likely give you your best rates.
Do your best to stay out of debt... you will be glad you did when you are older... and you are already on that track... so keep it up!
Ok so you want to get a car loan, but you made a few tragic mistakes.. You cancelled a few of your accounts, these are you life lines. In order for you to get a car loan the banks want to see trade lines and if you cancel them they have no current track record for you. So the only active tradeline you have is a Gap card, if you go and apply for a car loan you will need a cosigner unless you can come up with about 20%-30% for the down payment and expect to pay a high interest rate. In the future do not open and then cancel accounts , this only hurts your credit.
Good luck!!
I hope you get the car .
It can be a slippery slope
cut em up
i would say you would be surprised how good your credit rating is. i am going to assume you are buying a used car. if possible see if you can find a used car where the seller is pricing it below the loan value. than lets say the loan value is 1000 and you are only borrowing 800 against the car and you application clearly shows you can make the payments you will have no problem getting the loan.
You sound like you should have a good credit score. But to be safe you should pull your credit reoport. CR, Equifax, Trans Union as well. To see if you owe any debts. If you do they may have been refered over to a debt collection agency.
It fhat be the case then you must work quickly to get those debt's paid off because most (if not all) debt collection agencys are credit reporting agencys, and if you have debts that show up on your CR you will be denied things like, Loans, Car Loans, Credit Cards, etc.
You can get all that pulled and your credit score. I say this because you espically say that you unknowlingly opened a card. This could mean that someone opened a card to you without your consent and you should do all you can to follow up on this matter.
Your credit sounds great. If you are paying on time every month, then you are getting good "hits" for each payment. Why would you think your credit is bad?
Bad credit means you pay late, run your cards up to the max, miss payments, etc.
FYI, why would you get all the store cards with their high interest rates and cut up your Visa card? Stick to the major cards. Store cards rip you off.
FYI - why do you need a loan for a car? A car is a depreciating asset. Don't finance it, save up and buy a dependable used car for CASH! IF you are in the process of "paying down" a $200 to $300 balance on your Loft card, how on earth are you going to find $200 or $300 every month to make a car payment?
Pay off your credit, and put $300 buck in savings EVERY month for the next 6 to 12 months, then go find yourself a good reliable car. If you can't put that $300 away one month just imagine what would have happened if you had a car payment instead.
Several others made a good point - you don't have to close an account to stop using it! Your open credit is not at the point where you need to shut down bunch of accounts. Get a major credit card and keep it open. When you pay off the others, cut them up or put them in a safe deposit box, but don't close them.
You may get your doubts very well clarified from http://moneytips.bestmoneymatters.info... . Best wishes!
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