Well, this should help my credit score, but by how much?

Discussion in 'Credit Talk' started by Fl2BoysMom, Oct 1, 2015.

  1. Fl2BoysMom

    Fl2BoysMom Well-Known Member

    So on the 8th of July, we bought a car and got a loan for it. The loan was "Rule of 78" financing and the interest rate was high, but we managed to make that payment.

    Twice.

    We live right smack in the middle of the flooding that happened here in FL in early August and the car got flooded. We actually didn't think it was a big deal at the time. We Shop Vac'd the water out right away and the car ran fine for another 2-3 weeks.. until one day, the serpentine belt snapped. Hubby ordered one and fixed it, started the car, drove out of the driveway, and the car bucked and died.

    After a month in the shop, with the computer chasing the mechanic around in circles replacing this part and that part, he finally called a friend of his who specials in German diesels (We had bought a Volkswagen Passat TDI) and the guy asked him if the car got wet. He called and asked us and we told him yes, but we didn't think that mattered since we got the water out right away and the car drove fine for another couple of weeks. That's when he explained to us that the computer module was under our feet and the 'dampness' sitting in the carpets was just seeping in and corroding the ECM.

    So, we called the insurance company and they decided to total the car. Luckily, the finance company made us take GAP insurance too, so our entire loan is getting paid off. Less than 3 months after we took the loan.

    I'm sure that's going to help our credit scores, but I'm wondering by just how much...
     
  2. turconator

    turconator New Member

    Hey there. I don't believe that will help or hurt your credit. The reason is because whoever financed the loan may not even get around to reporting it to the bureaus since the loan was not active long enough. If on the off chance they do report it to the credit bureaus, they will show it as paid in full, but it still won't help raise your score since the loan hasn't aged enough for it to count much, if at all. Just FYI, in general, loans should be paid on and serviced for at least 6 months to help raise your score. The good news is, this scenario doesn't hurt you.
    I know it's not what you expected to hear, but it's just the way the game is played.
     
  3. Fl2BoysMom

    Fl2BoysMom Well-Known Member

    Thanks. It actually reported as of the first payment. So, two payments will show up on the credit report, then the payoff. Ah well, plenty of other ways to raise the credit score.
     
  4. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    I'm curious if the payments eventually all showed up on your credit reports? Can you please update us? Also, having a paid in full car loan on your credit reports certainly doesn't hurt your credit scores, and should also help you get approved when you apply for another car loan.

    Really sorry to hear about the flooding and car...
     

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