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Will Trading My Car Tank My Scores ?


exxo2
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I'm considering trading my car in for a new one. However, being that I also want to do a mortgage, will this drop my credit score ?

Now as far as cost, the dealer says they can get the new one financed for the EXACT same payment as my current one or lower. So, I was thinking my debt to income ratio would not change BUT, will the new loan appearing on my credit file drop my score ?

I figured it may change my history or something.

By the way, the dealership DEFINITELY didn't pull my credit report yet at my request.

They know I'm concerned about inquiries. They are trustworthy. I have bought like my last 6 cars from them over the years.

Please tell me your opinions on should i do this or not.

Thanks.

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Also, as far as my revolving credit card utilization, i'm just waiting for it to update. i have 2 credit cards-1 of which I paid in full so the balance is ZERO. the other one-I paid all of it but $75 off. But the limit on that one is $800.

I'm authorized user on 2 other cards. Those 2 have a combined limit of $5,000 , but they have a combined balance of about $160.

So, my utilization should be showing extra low as soon as those first 2 update on the reports to show the payments. The authorized user ones are already showing correctly. No chance of any of them going up. I intentionally paid them off in preparation for mortgage shopping.

So my utilization is what now ? about 8% ? I'm guessing. Does that help too?

The car still a bad idea ? If so, I don't HAVE to have the new car but I sure do WANT it. But not if it'll screw up a mortgage.

More comments please.

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It most likely will not hurt your chances to get a mortgage. Car companies only use one bureau when they pull credit, and unless your middle score is extreamly borderline, you would be fine.

The nice thing is that your tradeline is a "car line", so if you have had your existing loan for 2 years, and get a new loan, the length of time carries forward, so you still would have a 2+ years trade line.

Also, you have done everything that I know of to do to have your highest scores, low utilization, probably the AU trade lines are over 2 years old.

Charles

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Keep your self to a master plan for your finances and you should be fine.

It would be a good idea to plan on your total obligations (housing payment, installment debt, andother debt) to be (hopefully) no more than 35 - 40 percent of your gross income. This will include your new home purchase.

If you are looking to buy a home in the near future, then you will need to do a little homework and find out how much it will cost to get the type of home you are wanting to buy. Take the thousands of dollars and mulitply by 7 and you should be fairly close to the payment on the mortgage with fairly decent credit.

Now that you have an idea of what a decent home will cost, you can budget your car payment accordingly.

I suppose it becomes a choice of one's personal priorities.

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