Credit union approved my car loan. 17k. Is it going to kill my scores if I take on that loan? Right now, it's just preapproved, so it's not on my report yet (except the inquiry). Rate is 6.5% for 60 mos. Advice? Is that a good deal or not? I need a new car, but I could wait awhile longer if I had to. I don't really need to apply for anything else for awhile, so i guess it doesn't matter if my score drops for awhile. Just in case, I went ahead and applied for a Cap One and Citibank also so I could get a card before my scores nosedive. (Got instant approval for the 14.9% Cap One, and a "we'll call you" on the Citibank.) How long will the installment loan actually hurt me?
It really depends... some people may actually get a boost for an installment loan... I would say it could hurt for 6 months... but , I do not see it having a large negative effect, such as not allowing you to get approved for a credit card. This is in my opinion, not gospel.
Is it because it's RECENT credit that it hurts, or is there some negative perception about big installment loans in general? My avg length of history is apparently pretty long (oldest active acct is 13 years), and I've got a couple of old inactive ones that I'm trying to reactivate to help offset. So the age thing might not hurt me much. The other issue is that my old paid car loan may fall off any time, and then I'm afraid I might not be ABLE to get an installment loan at all because I've heard it's harder if you don't have any history of paying a large loan like that. I just hate to wreck my scores. I just got them up to a marginal level. This credit thing is like a minefield.
I'll let you know what happens to my scores when my loan hits the CRA's, wkn. With all the preaching I've heard from the underwriters and bankers about not having an auto loan on my reports, I would think it would increase. Although knowing my luck my scores will probably bottom out. I like the minefield analogy--it's so true.
My scores have gone up since getting a new CC from Juniper. However by the time Juniper hit, my other balances were also coming down. So as long as your other debts are decreasing, they may offset the dip from the new credit. Also the 13-year old tradeline will help keep your average age of accounts high. Would you consider buying a less expensive car or slightly used one in order to decrease both the amount you owe, and the amount of time you'll be in debt?
I know a few people that buy 3+ year old cars all the time...keep them for a few years and then sell them. They say that MOST problems occur in the first 2-3 years...and the new car "LOSS" is his gain...$$$$ THE SECOND THE NEW CAR IS OFF THE LOT YOU LOSE BIG TIME...(in most cases).
Yes, I'm considering that. The only issues are a) I had a REALLY bad used car experience once (a car that I bought from a well-respected dealer) and b) I put a lot of miles on a car and need one with a nice warranty, and c) I can't get a really small car either because of work and too many children to haul around. But I'm looking around. I've got 60 days to use the loan, so I've got time. And I don't have to use the whole 17k. That's just my preapproved limit.
