Building Credit?

Question

I purchase a 2007 Hyun. Sonata limited ed....with my dad co-signing=$450.00 a month. I had no credit. I've had my car 4 months all my payments have been made on time...February of next year do you think I could get something way better...like acura? Suggestion..

What else would be helpful to raise my credit score...?

Thanks

Answer 1

Credit is a *****. Because you make one mistake, such as missing a car payment or not paying in general and BAM u got 7yrs till  u have another chance. Pretty much credit is reviewed every year. And the best way to raise credit is to open a checking and savings account. Then you save 2000. You then ask the bank to give you a 1000 loan, which they will no questions asked because you have 2000. You then go and pay back the loan. AND BAM instant perfect credit. Also capitalone.com offers great credit cards such as a 300$ limit with 6.9apr. That would be another way, just buy 50$ of stuff you want. Then pay it all back. Next month buy 30$ pay it all back the following payment. I mean there are countless ways to build credit. Getting a car with ur dad as co-signer probably wasnt the best way to go about it. Because for what you are paying you could have gotten a nice used car for 5-9000. And the payments would have been maybe 150. But if your raking in that much cash, then good for you. But yes, just pay on time, and getting a loan from the bank that you pay right back is the best way. Credit cards are next, but they are very dangerous because if you pay 3months in a row then you go from 300 to 500 then sooner or later you will see your 500 to 5000. That is why people are in so much trouble with credit cards.

Answer 2

Ok, and now for the REAL answer. Although I work as a credit analyst/underwriter at a credit card company, I've also have had past experience in auto sales/finance as well. I'll be honest with you, you have a LOT to learn when it comes to credit.

For starters, credit is designed to be used over time. That's why you can reuse credit cards after you pay them off, and you can have up to 7 years to pay off a car in some cases, and up to 30 years to pay off a house. These are considered "big ticket" purchases. The major difference between the 2 is that most times a house can appreciate in value, while cars more than always depreciate in value. So to answer your question, could you get something better? Theoretically you could, but it would end up costing you more money that it would even be worth. If you really wanted an Acura, you should've either financed a much cheaper car to build up your credit, THEN try to finanace the Acura a year or two later, OR just go straight for the Acura, but hindsight's ALWAYS 20/20, so for right now, just work with what you have.

My suggestion to you would be to focus on keeping those on-time payments coming. Installment credit (car loans & mortgages), are different from revolving (credit cards & line of credit). If you're paying $450/month for the car, then that's not factoring in full coverage insurance, maintenance, and gas, that's enough to keep up with, for now. Some other ways to build credit would be opening up one credit card account, making SMALL purchases and paying it in full on time every month. But I strongly suggest that you don't do it unless, you can fit it into your budget. At least with the auto loan, it's a set payment every month, compared to a credit card that can easily get out of control.

Answer 3

wow 450 a month for a sonata...that is pretty expensive for a hyundai! i got a bmw and my monthly payment is 453. You would get a better credit by february of next year if you pay your bills on time. are you looking to trade your car or sell it privately?

Answer 4

Chastons doesn't understand credit and is confusing payment with cost.

You have a one year old car and your already talking about replacing it?  Depending on the details of your loan, you may have to pay someone to take it off your hands because cars typically lose 20% of their value when you sign the paperwork and they are no longer "new".

Buying new cars frequently is the best way to never have any real money in your hands.  You also shouldn't be pushing the edge of your credit to buy a car unless it's basic transportation that you need to get to work.