Saturday, July 4th, 2009

Building credit?

building credit
aero375 asked:


I have recently recieved my inheritance and have decided to buy my first truck with my own money.

I was thinking of buying it straight up leaving the bank out of the transaction. Then it occured to me that this is a major part of my credit history.

Would I be better off building my credit up with a loan from the bank or should I just buy it and not worry about intrest and such?

I have not had many large transactions on my CC so I thought this would be a reasonable place to start.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

This entry was posted on Saturday, July 4th, 2009 at 12:00 am and is filed under How To Improve Your Credit Score. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

5 Responses to “Building credit?”

hyabusawife Says:
July 5th, 2009 at 5:27 pm

I would purchase the majority with cash then take a small loan. It will help establish a credit history. Take a 1 year loan and pay it off to minimize your intrest.

jeerota909 Says:
July 8th, 2009 at 1:41 pm

Its really a matter of choice as both are good options. If it were me I would take out a loan and invest the money into a mutual fund of some kind which should make more then the interest will cost you as some funds are averaging about 12%. Spending the money up front will take a chunk out your inheritance that you could invest. Depending on how much you got I would say the best option is to just eat the interest and build your credit history.

zeph88 Says:
July 10th, 2009 at 11:42 am

assuming you have no credit to start at, pay as much as you can afford with the cash you got, and take a tiny loan out to pay the rest. My dad says that people with no credit or poor credit have high interest rates.

If you have existing credit, but not for a long time (like me, only 1.5 years), half-half is good. pay half and take the loan on the other half

Poor or bad credit: settle for something less. this area you get the highest interest rates and a bad deal if you need a loan.

DallasLoanGuy Says:
July 13th, 2009 at 8:21 am

Don’t consider the interest on the loan as a cost of buying the vehicle, consider it a cost of establishing/maintaining a strong credit rating.

It is too hard to answer this question without seeing your entire credit history. But my experience tells me that it is a good thing to establish new lines of credit on occasion. Which is best for you really does depend on your current credit file. If it is pretty thin like you elude, you may want to finance the vehicle and then pay 75% of it off right away…. then pay out the remaining 25%(or whatever number) over 24+ months. This way you establish the FULL amount of credit line, but pay very little interest because interest can only be charged on what you OWE…. not the amount borrowed.
A long credit history is a part of the scoring. Also, if you have no auto loans, your FICO score will be lower than if you did have one.

Ashlee Says:
July 14th, 2009 at 5:49 pm

One of the first steps to building credit is to open a checking and a savings account in your name. You may already have an account, and it is something many lenders will look at, as it show stability. If you only have a checking account, you may also want to open a savings account as well, which can be used as collateral for a secured loan,if necessarycredit, and they accept a large percentage of applicants. However, don’t get more than one card, as its too easy to start running up balances, and it also looks better for your credit if you don’t open a number of accounts in a short period of time.

Leave a Reply

You must be logged in to post a comment.