Question by beetle1283: How much does a small used auto loan impact my credit?
I am about to buy a 2003 Honda Civic from my uncle for approximately $ 10,000. I had intentions of putting down 5,000 or 6,500 dollars (depending on what I sell my current car for) and take out a small auto loan for the remaing 3,500 or 5,000 for about 36 months.
The rates I am finding are not as good as I would have hoped, through no fault of my own. I am 24 and haven’t done anything that would have given me bad credit. I pay back all my bills and whatnot.
Am I better off just buying the car outright (I can afford it) or taking out a loan for the sake of taking out a loan. I’ve heard a few times that a small loan really helps your credit.
So put down 5,000, take out the 5,000 loan amount, put 5,000 in a savings account and let the loan cycle? What does that mean.
Best answer:
Answer by P J
Put the money to pay off the loan in a savings account, get the loan let it cycle about 6 months then pay the balance off. This gives you a payment history although you will pay a bit of interest it will be a good trade line.
Also initially your score will take a 5-7 point hit for the credit report when getting the loan, rebounds rapidly!
Add your own answer in the comments!
Consumer Alert: Baron and Budd Warns of Possible Mortgage Scam
Los Angeles, CA (PRWEB) January 11, 2012
The law firm of Baron and Budd is issuing a warning to homeowners that major mortgage lenders may be unlawfully charging excessive fees to people who have been late making their mortgage payments.
The scheme works like this: A customer is 20 or more days late in making their payment, but eventually gets caught up again. In addition to the delinquent balance, however, when a customer is late, the bank unlawfully tacks on improper fees and other charges that must be paid before the loan is considered current. The amounts assessed to the account may be relatively small in comparison to the delinquent balance, so often the bank adds these fees to the loan balance without fully disclosing the nature of the charges to the homeowner.
How do I know I’ve been a victim?
Because banks do not want homeowners to notice that they are being charged these improper fees, the answer may not be clear. These fees usually appear on loan statements as “other fees” or “other charges.” Additionally, if you were in bankruptcy and were able to arrange for a plan to pay the delinquent balance on your loan through the bankruptcy proceedings, these charges may be identified in papers your lender filed in the bankruptcy court, and they may be identified as “miscellaneous charges,” “miscellaneous fees,” or they may be lumped in with the bank’s attorneys’ fee charges, as requested in the bankruptcy court. Baron and Budd can review your loan statements or bankruptcy documents to determine if such unlawful bankruptcy fees were assessed on your account.
Does Baron and Budd have the experience?
Unfortunately, financial institutions have been taking advantage of consumers for a long time. But Baron and Budd has been at the forefront in protecting consumers from fraudulent acts.
Baron and Budd recently served on a committee that reached a $ 410 million settlement with Bank of America to compensate consumers who had been victims of misleading overdraft fees. The settlement forced Bank of America and other banks to change their convoluted overdraft fee policies. Baron and Budd is also pursuing cases against JPMorgan Chase and other financial institutions over similar financial issues.
What do I do now?
If you are a homeowner who was behind on mortgage payments but is now current, you may have been overcharged on fees. Contact Baron and Budd at 1-866-656-2425 or email us at info(at)baronbudd(dot)com for a free consultation.
Though Baron and Budd has expanded its practice to protect what’s right for people who have suffered financial harms, the firm was originally founded to protect what’s right for mesothelioma patients and their families. The firm was one of the very first to successfully litigate a mesothelioma lawsuit and continues to fight today. Learn more at Baron and Budd’s dedicated mesothelioma website.
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Auto finance is what I do for a living and auto loans take 6-months of payments made as agreed to be rated.
Your credit will be helped the best after 12-payments made as agreed. This is the first thing lenders look for when they are looking at a application for credit.
I would agree with PJ except for the amount of payments you should make. I would make at least 12, and make sure whatever lender you use that they report to all three credit bureaus or you are wasting your time.
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