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credit advice, new car

S

sumguy

New member
Planning to buy a new car and need some credit advice. Not a lot of friends or family that are credit and web smart so throwing this out on the web. I could ask this on the biking forum I frequent but opinions are just a little biased.

Situation: Car free almost 2 years - biking everywhere, just finished a 5yr credit consolidation program so $0 credit card debt and all accounts closed, stable job, couple "adverse" listings on credit report from before the program, 1 of 3 bureaus has my credit score at 749 haven't checked the other 2, I'm terrible at haggling.

Questions: Should I open a small credit card before the car purchase? Should I get online quotes from the local dealer and/or pre-approved online financing from the dealer or 3rd party? Skip the online stuff and get some basic pricing for my model then see the dealer? I'm worried if I try the online stuff and am denied it will put some dings in the report. Any bad or good experiences with online quotes or pre-approved financing? Should I go for a longer loan and make double/triple payments or go short term loan with higher payments?

BTW all my CC accounts were closed when I entered the program 5 yrs ago. I can live without a CC and won't make the same mistakes if getting another one. If I don't like the APR offered or am downgraded I'm walking.
 
Ignore the online stuff from "third parties" - those tend to be helpful until you finally get everything approved, give them some money, and then it can take a LONG time to get the money from that point. They tend to disappear on you once it is their turn to give you money....lol. In other words, this may be the longest route to getting a loan and a car...and take the most number of phone calls in the end. :)

What i'd do in your place is to go to a bank and see if they can pre-qualify you for the loan. You can tell them your credit score, give them info about bank statements, give them a copy of a pay check, etc....and they can tell you if you SHOULD get the loan or not. They can also tell you the interest rate, monthly note, etc. if you do get the loan. Ask for a truth in lending document so you can search for hidden fees. (FYI, if you get pre-qualified, you stand a really high chance of them giving you the laon later- near 100% if you hadn't lied to them about something. Finding a bank that'll give you a loan (i.e., that'll pre-qual you for that purpose) may or may not bea easy. That's what the phone is for.

Obviously, you then fine the vehicle you want and let them offer you the best rate they can. Go with them if it is cheaper than the bank, but don't TELL them you are pre-qualified for another loan until they tell you what the best they can do happens to be. That bank loan is your ace in the hole for trying to get a lower rate from the car company. :) Just don't let them ping your credit score UNTIL they offer you a lower rate. You can tell them "What's the best you can do assuming my credit score is over 720?" They'll work with you just on that, or get up to leave and say you are going back to the (insert competitor here) dealership since they were much more helpful there.

Just always stress they can't ping your credit history until you give them permission and an agreement is already made. Easy. ...and that's how I would do it. Just remember - they make a lot of money off of interest. You have no right to be NICE to them by giving them any more money than you have to.

That's a good credit score, so the only way I can see them rejecting you is if they say you don't make enough money per month. Shrug? On the credit card, I'd wait until after the car loan since a car note won't effect the CC application. Either way, with a score like that, I will be surprised if you see a problem unless it's with a monthly paycheck amount.

GOOD LUCK!
KJ
 
thanks for the tips. Talking to a bank loan rep first and then using that info should keep the salesmen from pulling a fast one. I probably would have just dealt with the dealership only. May as well check out my other 2 credit reports just to cover all the bases. I have a couple other models I still want to check out also and made sure they knew I was going for some other test drives.
 
I wish my credit score was that high.... I'm about in the low to mid 600's, and I got a loan for a house. I'm sure you'll be fine.
 
ZoologyGirl said:
I wish my credit score was that high.... I'm about in the low to mid 600's, and I got a loan for a house. I'm sure you'll be fine.
Click to expand...
Most important thing is to never make late payments and reduce debt. Just checked the other 2 agencies and have a 100 point spread.

The plan wasn't easy - Owed 10s of thousands via several CC and was paying 28% APR before getting into it. They make a budget and tell you what they think you should pay. Close to 50% when I started; take it or leave it. It was worth not getting the phone calls and letters every day. You pay them every two weeks, they make the monthly payments but renegotiated the APR as low as 4%-9.9%. Good thing they don't increase your rates so overtime and yearly raises made it easier.

I hate getting loans, mortgages would be a nightmare with everybody wanting to get a cut for pushing paperwork around. Greedy bastages.
 
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