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 Student Loans
Profile Image

Question By
maizenbluemb2

0 Contributions
0 People Helped
Should I pay off my student loans or buy a new car with hopes of building credit?
I have approximately $8,500 in student loans and debating whether or not I should pay them off or not. I lost my home to foreclosure back in March of 2011 due to the company I worked for going under and not being able to find a job paying what I used to make. Therefore my credit obviously took a huge hit. I have paid off almost all of my other debt with the exception of my student loans. Luckily I was able to find a job with a very high profile company making even more money than what I made when I had my previous home. I have been with the company for a year and a half and in the meantime have had to move my family to an apartment. I am currently paying almost $700/month here plus utilities and would rather be putting this towards a mortgage to build equity. Here is where I am at a crossroads... Money is good and I am finding myself questioning how to spend it to better my credit. I have 2 vehicles and have never had a car loan (always pay cash), however, I am told that a car loan can be a great way to boost my credit. I also have enough to pay off my student loans. Long story short I guess my question is actually four questions: 1.) Should I pay off my student loans in full? 2.) Should I buy a new car to try expedite my credit repair process? 3.) Would it be beneficial or make any sense to do one or the other or both? 4.) Should I take the money I have saved and instead put it towards a home as a down payment and try for a subprime loan? Again my goal is to put my family in a good home as soon as possible; but I also understand that time will heal my credit and in the long run help me in the loan approval process, interest rates, etc. My ultimate goal (if possible) would be to have my family in a home by Christmas 2014 and just want to know what people think the best route will be for my situation. Appreciate any and all suggestions!

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.