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Posted in Auto Loans
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Question By
kkay481

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Purchasing a new vehicle
I have been working towards getting a new Jeep for about 6 months now. I have been paying double payments on my Civic as well as got my extended warranty refunded to my Civic. I have paid it down about $4500 in about 4 months. I am still upside down by about $2,000. I am waiting until we get our tax refund to put a $2500-$3000 down payment on a Jeep and trade the civic in. I have tried to get into a Jeep as of now, ( I would be carrying over $2000 of neg. equity) but I keep being told "it's going to be a fight".... I have been working very hard on my credit for the past year, I am at a 619 on Equifax and a 622 on Transunion. However, I am being told that my score is a 570-580 when car dealerships run my information to purchase a Jeep.

I am just wondering if what I am trying to do is even obtainable. If not, I will just pay the Civic off and then do it. I just didn't think I was in that bad of a situation being that we got into the Civic at a 8% interest rate and 244.52 a month. I haven't missed a payment and have had NO late payments and have been paying on the car for a year and a half now. I don't have any credit cards, and cannot get approved for ANY I apply for.

Just need some advice/opinions.

I am thinking because I have tried to get approved and am not, when I go back in in a month or so with a few grand down I should be good.

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You have a lot to learn

Helpful to 1 out of 1 people

I commend you on trying to improve things for yourself, but I strongly recommend that you do the reading necessary to gain the knowledge that you need to improve your credit. Helpful information is all over the internet, you just got to designate many hours to reading it. The time spent will be well spent as the info will help you for the rest of your life. Just a few things to start with:

Know the difference in credit scores. The scores that you get here are Vantage, but most lenders will use a version of FICO. An auto lender will usually use an "auto version" of FICO. During credit building FICO scores should be focused on more than any other scoring model, because most lenders use a version of FICO. Fico scores are not free, but it is worth paying for them if you are building credit.

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Paying off and closing the loan on your Civic is going to DECREASE your credit scores even further. Most of the time, especially when you have "too few accounts" when you pay off and close a loan it will HURT!!

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Not having any credit cards is a HUGE PROBLEM, you need to get credit cards to build credit. You CAN get credit cards, go the secured route. Just make sure that you go with a lender that reports to all three credit bureaus. Look for SECURED CREDIT CARDS from lenders like Capital One or OpenSky. There are also lenders out there such as First Premiere and Credit One which will give just about anyone a credit card, but they are to be avoided due to high cost, but it is an option if you cannot find anyone else to approve you.

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My advice to you: READ, READ & READ SOME MORE!! Work on building your credit, don't work to pay off your loan, instead work to pay it down as you have been doing, but don't close it. Set your sights for the new jeep at six months to a year, to give you adequate time to start a nice credit build. Down payment is important as you know, so keep saving for that too. If you have any questions along the way of your credit building journey, please feel free to ask.

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Reply by
lauravalerie

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Helpful to 2 out of 2 people

I wish I'd had someone like you around when I first entered the world of credit ten years ago... this advice could have saved me lots of trouble! Good thing is, good advice never goes out of style, so thanks for sharing these tidbits. :)

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Thank you lauravalerie, thank you for your kind words. I think many of us have made many mistakes when young and uneducated about credit, I know as well as you know that credit is very important in this life, that is why I try to get on here often and try to help educate people so they don't make mistakes that lead to hardship in the future. By donating a little time on here, I feel that I can truly make a difference in the worlds of many, at least I hope to.

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