How much does a small used auto loan impact my credit?
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!
What do you think? Answer below!
US $14,990.00
