Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Auto Loans
Profile Image

Question By
Nator06

0 Contributions
0 People Helped
Auto Loan and my interesting situation
Long story short; I am about to graduate college and start paying bakc my student loans. I currently live at my parents but my career could take me some where where I need to purchase a home. I have some money in savings, a secured credit card, and fair (borderline poor) credit score and I really want to increase it. My car gets horrible gas mileage and is a beater car but works fine. If i purchase the car, after budgeting I would have about $500 dollars per month to save. If I don't buy the car I would have $800-$1000 dollars to save per month. I could purchase a home in a few years if I saved with purchasing the car but not have as large of a down payment. Should I wait on the car and save more for a house in a few years, but having my credit go stagnant (600), or buy the car increase my credit, but save less for a house?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
654 Contributions
288 People Helped

With a 600 score it is very unlikely to get a mortgage.  It would be very logical to get a car loan for credit score improvments.  Very bad in the way of financial moves, because paying interest is never the best course in money managment.  If I were you I personally would get a car loan, but make it as low as possible. I would pay mostly cash for the car so your payments could be 100-200 a month, then pay off the loan within two years.

By doing this you have expanded your types of credit history as well as shown regular payments on a major purchase.

HOWEVER......with a 600 score you might have a very hard time getting a decent rate on a car loan, typically you need over 700 preferably over 750 score to get a good car loan.  Your first step would to be trying to get a non-secured credit card.  then maybe in a year try a car loan when you have a higher credit rating.

Top Contributor
11748 Contributions
4505 People Helped

You will not HAVE to buy a house.  Most new graduates move several times before they settle down, and houses do not sell quickly in most cases.  Best to continue saving, build your credit score (read the articles on this site for good advice on that) and then, perhaps, consider a house.  There is nothing wrong with renting, especially since you won't have the concern of paying for home and appliance repairs when those.items belong to the landlord.

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.