General Question

Ciaolucedelsole's avatar

How to improve credit score within 2-3 months?

Asked by Ciaolucedelsole (78points) November 25th, 2013

It’s time for a new car before the one I’m currently driving dies on me. I don’t use credit, I have no open accounts. There are at least 7 accounts in collections, in total about $2,500 unpaid.

If I paid these off, opened a secured credit card and started using it & paying it off every month, would I be able to raise my credit score enough to get at least 20% interest on a car instead of 25%? Preferrably higher, but I know I may need a year or two at least to create some history.

What do you think? Anyone with experience in this? Any advice out there for me?

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13 Answers

YARNLADY's avatar

It depends on what kind of credit you are trying to get, and how lenient the loan officer feels. You have to convince them you are able to pay back the loan.

Credit Unions are the best places to get car loans, and if you have automatic deposit of your pay check, it will be easier.

elbanditoroso's avatar

In that time frame, it is very unlikely. What credit grantors are looking for is:

a) evidence that you pay. [Having 7 items in collection is negative evidence and is not going to fill them with confidence.]

b) consistency over time – [three months is not enough time to convince them. Six months to a year is what they are looking for.]

Bottom line: not much you can do in the short term. The best thing you can do, no matter what, is to pay off the stuff in collections.

Ciaolucedelsole's avatar

@YARNLADY My job doesn’t offer direct deposit unfortunately. But I CAN open a bank account and show regular deposits? Right now I use the walmart money card. I’ll have to look into if that can count as an online banking account at least.

@elbanditoroso Dang it. Is opening a secured credit card a good idea, then? Just one, two, three? Should I buy a piece of jewelry or furniture or try to take out a loan also in the mean time? I’m not sure what is the best way to build credit. Also, most of the items are medically related (eye dr, emergency room, dr office).

ARE_you_kidding_me's avatar

Building credit takes time. Car loans are ~2% not not 20% so don’t worry about it too much. If you can get the loan (may need a cosigner) and can afford the payments that will help build your score. The bad stuff on your credit history will be there for ~7years, 3 months is just not going to happen. If a lender is offering 20% interest then you don’t use that lender. Period.

Adagio's avatar

20% interest sounds outrageous, I wouldn’t sign myself up to a contract like that, just asking for trouble.

Ciaolucedelsole's avatar

Sadly, the only place that didnt reject me wanted 25% interest with $1,000 down. I dont have much of a choice once the current car I have goes. I dont have the cash for another, no one to cosign, no one to borrow from.

I am going to try to buy a $10–12k car, keep it for 18mos while my credit repairs, then trade it in for something better at a lower interest rate.

ARE_you_kidding_me's avatar

Just a warning, if it was one of those “we’ll finance anyone” places sometimes they can be predatory lenders. Repo, resell…..repo, resell…. how bad is your actual car? what’s wrong with it? repairs on old cars are not usually as expensive as getting a newer car. I would seriously question if you need a car that expensive when the best you’ll get is 25%. $1000 is not a bad repair safety net. You run the same risk when getting a newer car also. You could get a lemon and be in even worse shape.

Adagio's avatar

I must agree with @ARE_you_kidding_me , I think you would be totally foolish to contract yourself to a loan shark, because that sounds exactly the kind of lender behind this offer, people get caught in a net with contracts like this, it can be almost impossible to get out of it. You might think now that it will be nice to have a new car but not long down the track you will most likely be kicking yourself for being so gullible.

jerv's avatar

@ARE_you_kidding_me Sub-prime car loans are 20% or more. That 2% is for “qualified buyers”. For those with less than stellar credit, 5–15% is more likely. Life is cheaper when you already have money.

Ciaolucedelsole's avatar

It was through carmax, one of their lenders.

I have an 01 grand am that i bought off craigslist, but i think it was totalled & half ass repaired & sold. Ive fixed back shocks (struts? Idk the difference), it still needs the front. It needs rack & pinion, wheel bearings, all 4 tires, one of the battery cables replaced, the car goes dead randomly. I already had the radiator replaced. The passenger window fell into the door, something is wrong with the transmission pump (?) & fuel injector, ignition locks randomly, key hole in door does also, thats all i remember so far. You cant slow down if u’re going over 45–50mph, i spun in circles one day when someone stopped too fast. When i hit bumps the car tries to throw itself off the road. Oh, & gauge that tells u when the car is overheating doesnt work at all. i have a little boy & i drive an hr each way to work. I spend $100/week on gas. That car is a death trap if it doesnt break down first. It’s not worth the thousands it will take to fix it. Multiple mechanics have told me it’s a mess & to get rid of it.

ARE_you_kidding_me's avatar

Yeah, you need a new one. Carmax is ok.

jerv's avatar

Makes me appreciate the $1000 ‘86 Corolla I got to replace the $300 Corolla I totaled after 4 years of driving it. Craigslist has been good to me!

ISmart's avatar

have someone cosign for you on a $3,000 used car…

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