I want to buy a new car because I want to boost up my credit rating so I can get a house later in life. Now I have enough money to purchase a decent car with cash. Will this affect my credit rating? Maybe I should get the loan and pay it off quickly?
2007-06-12 06:55:16 · 10 answers · asked by Jacob B 2 in Business & Finance ➔ Credit
Neither. It doesn't even register on your credit. ~
2007-06-12 07:02:37 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Getting the loan and paying it off quickly sounds like the best idea. If you buy it cash the credit bureau never even knows you purchased anything so it will have no effect. MAKE SURE the new loan is from a company that reports to the credit bureau because some smaller companies do not report and then your just as good as paying cash.
If you take out a loan to buy the car your score may drop a little initially and then go up much more once the loan is paid off.
If you are able to pay it quickly you wont spend too much more in interest and your getting the better rating which will make this cheaper later.
Good job for staying on top of your credit....Best of luck!
2007-06-12 07:05:50 · answer #2 · answered by Jennifer M 2 · 1⤊ 0⤋
If your goal is to improve your credit rating, you should finance the car. Unless you can get a promotional rate from the dealer (0% financing, for example), you'd probably be better off getting your financing from your bank or credit union. Put down a big down payment and just finance a small portion. Also, if your intention is to pay off the loan quickly, be sure there is no pre-payment penalty clause in the contract you sign.
2007-06-12 07:01:19 · answer #3 · answered by Kathryn 6 · 2⤊ 0⤋
If you purchase a car with cash it'll affect your credit rating the same as a loan. Only difference is with a loan they can report payments to the credit bureaus with cash you have a paid installment loan on your credit report
2007-06-12 07:01:05 · answer #4 · answered by K.C. 5 · 0⤊ 1⤋
Since there was no 'credit' involved in a cash purchase, it will not appear on your credit report, nor will it affect your FICO in any manner. If you want to use a car purchase to affect your FICO, take out the cheapest loan you can find, and honor the terms perfectly.
2007-06-12 07:02:37 · answer #5 · answered by acermill 7 · 0⤊ 0⤋
If you pay for it with cash, it will do nothing to your credit unless the dealership pulls your credit initially. This inquiry will drop your score. If you wanting to improve your credit, I would get a loan and of course make your payments on time. Good luck!
2007-06-12 07:04:54 · answer #6 · answered by Anonymous · 0⤊ 0⤋
No ! this tip took yrs to lock up so use it wisely,
1st, if you do have cash open a charge card acct.
2nd,pay for the car over time,it may cost you a little more money,but if your creative you can talk the sales person into a spot so you won't over pay, paying off fast is not what the banks look at. It's time and payment history.
Thats all you get !
2007-06-12 07:06:43 · answer #7 · answered by DR DEAL 5 · 0⤊ 0⤋
Auto finance is what I do for a living and paying cash will not effect your score at all.
What you need to do is put 50% down and finance the balance for like 36-months. Make at least 12-18 payments before you pay it off.
This will establish a good pay history and a good score.
Be sure to make at least 12-payments before you pay off the loan. This is one of the first things lenders look for.
2007-06-12 07:02:48 · answer #8 · answered by ? 7 · 1⤊ 0⤋
Paying cash for anything will have no affect on your credit score what so ever. Cash transactions are not reported to credit reporting agencies.
2007-06-12 07:00:18 · answer #9 · answered by Bostonian In MO 7 · 1⤊ 0⤋
If you pay cash I don't think it does anything to your credit rating. Credit rating is based on credit you receive and you paying it back on time.
2007-06-12 06:59:44 · answer #10 · answered by Kathleen M 4 · 1⤊ 0⤋