Here's the scenario.. Instead of struggling to get a loan for an 10,000 car and paying high interest, how about this option? If say I saved 8000.. Got a line of credit at a CU, and then put that money in there. Now say I settled for a cheaper car costing 7500 or so.. I pull MY OWN money out of the CU Line of Credit to pay for the car. You might be wondering why the roundabout way instead of buying a car in cash.. But the objective is to get a positive TL of some sort going by using the CU Line of Credit and paying it off. Would I be able to do this? Like, put my money into a CU for some line of credit, then borrow against what I put in? Can someone explain how this works, if it's possible? Do the CUs report to the three CRAs? How easy is it to become a member of a CU and how long does it take to set up? Please advise, I did a search on this topic but there were way too many posts under line of credit, I got through about 20 and thought I'd just ask about this situation. Help is appreciated. Thanks. h.a.
I think it's an excellent idea. You need to talk to your local CU and banks for what you want to do and see what they offer. Make sure they report. you could also do this in smaller chunks (doesn't help with the car) but builds positive trade lines. Some people call it a credit waltz or dance......they open like 3 cd's with 3 different banks then go back and open secured loans with the cd's as collateral then use the proceeds to pay the payments every 3 weeks or so, so it gets paid off early. The key is making sure they report I'd imagine, I have never done it myself. Installment loans wouldn't hurt your score like a lot of new revolving would I would think.
DO NOT TELL THEM you are buying a car with the loc. If they ask why, make up some reason. But generally speaking, its kinda why you aren't (at least in my state) allowed to charge a car. Something to do with who owns the car ultimately. Take the cash out and buy it, but certainly don't write a personal reserve check. Until you've checked out the financing laws in your hood. If you were to (oops) default on the loan and it was charged, ploc'd in some states they can seize the property. They can't seize a cash withdrawal!
Re: Re: Borrowing against Line of Credit! I'm not sure this applies in this case, since he's talking about taking out a secured loan anyway. It's worth looking into, though. Brett
