Credit Question

Submitted by Anonymous (not verified) on Thu, 02/12/2009 - 18:51

Hello I am new to the community also young 19 years old and trying to figure out how I can increase my credit score so I can get approved for a new car. I recently went out and have had 3 credit pulls from different car dealers. The paper work they receive puts my credit score around 580-595, but when I check online at etc. it says my equifax score is at 605. I also have two loans and 2 credit cards out at the moment. Both my credit cards are low limits under $1000 and I have about 55% of one used and 35% of the other use. And I have a 10k current car loan and a $5k personal loan. I have never missed a payment on anything. I am about to just pay off the personal loan in the next week which has a remaining balance of $900, this would make the 3yr loan term paid off in 1 year. I am trying to get the new car here soon in the next month. I am wondering if I pay off this one personal loan will it increase my chances of getting approved for the new car loan. The new loan that I am asking for is about 22k for a 6 year term. I really want to do this on my own and not have a co-signer, and also I dont want to wait almost 6 months just for my score to go up to get approved. Is there anything I could do, besides getting the other credit card to 35% which wont be to hard. Also my Job situation is very good for my age and the monthly payment of what the new loan would be is only 1/8th of my monthly salary. So that is very easy for me to afford. So if anyone could at all would be greatly appreciated.

Adam, You always want to keep your credit card debt on the lower side. You shoudl not use over 35% of your credit limit. I would pay down the one you have used 55% on to a lower amount to get it below 35%. Also yes paying off the personal loan should help you get the car loan. They will look at your debt to income ratio...meaning how much you make and how much you owe out. Most banks will not let you get a loan if you are paying out more than 55% of your income.
Also you say you pulled your report. Did you look over it really well and make sure there is not anything that shouldn't be on there? Are all the accounts paid on time and showing current? Little things like this can mean a great deal to a credit score.

Thu, 02/12/2009 - 19:04 Permalink

pay them down but don't close them, closing them out will definately lower your score, leave them open until you get your loan. So go ahead and pay them but keep a small balance on them, this will keep your available credit higher. Your income situation sounds great, no worries there, hope this helps.

Fri, 02/13/2009 - 03:50 Permalink

i agree with good natured on this issue that you should not close down the loan immediately as it will adversely affect your credit score.So my point is that you should not take new credit card in order to get a better score rather you should minimize the existing load of debt and thus try to improve the score. :arrow:

Sun, 03/08/2009 - 14:06 Permalink

Hi, Yes please dont close them as this will lower your score. Credit history, payment history, credit lenght will all bring your score up over time. Keeping your credit balance to 30% of your entire credit limits will also improve your score.

Sun, 04/12/2009 - 18:41 Permalink
Jack (not verified)

There are literally hundreds of credit repair websites and a lot of them try to guarantee success but the reality is most of them are just a waste of money. They use methods of repairing your credit you can do yourself if you simply google credit repair templates. Their process is very lengthy and requires months and even years to get a lot of things removed and sometimes the bad marks can come back as some companies are very persistent, especially if you still owe them money.

The only guaranteed method to repair your credit is to pay off the old bills and get your derogatory balances to $0. "Well that isn't very helpful" is probably what you are saying. Since none of us just have cash laying around to do that there are other things you can do that are guaranteed to increase your FICO score practically overnight and start rebuilding your credit.

It's actually very simple. Sign up for Millennium Secured Credit Card and send them $300. Buy $90 worth of groceries on it and make the payments. Keep the balance under $90. Then sign up for and get a $10,000 unsecured credit card, buy something and make the payments. Do a google search for USA Shopping Club and sign up with them for $12,500 unsecured credit card buy something and make the payments, Eclub USA and get your $3,500 credit card and finally Horizon Gold and get your $500 credit card.

Once all of these companies report to the credit bureaus you are going to see an immediate increase in your FICO score. Guaranteed. Then you can work on getting the bad marks paid off and removed. It's much easier to get them permanently deleted if you don't owe them any more money.

Tue, 05/26/2009 - 18:04 Permalink

yes right garrysnober if you keep the credit balance of 30% of your credit limit then it will definitly increase the credit score because if you are using your total limit then credit card agencies wont be able to calculate you card utilization. So definitly it will affect your credit score.So always try to keep the credit balance of 30% of your credit limit.


Wed, 06/03/2009 - 03:25 Permalink