Auto credit question
Question: Sometime this summer I’m planning to take out my first auto loan in over ten years. And already I’m a bit worried about my credit qualifications. There are no derogatory items on my credit report, and my income is certainly large enough to support the amount of loan I have in mind. Debt is the problem – more precisely, the *lack* of debt. My only current debts are a mortgage and a credit card, both with modest balances. But I’ve heard that the “credit scoring” systems used by most lenders today actually treat low debt balances (expressed as a percentage of income, presumably) as a suspicious item. I suppose that’s funny in a way, as excessive debt also is a no-no. I’m really worried that lenders will reject me due to my relatively debt-free lifestyle and I’ll be relegated to one of those ghastly “For Good People with Bad Credit” used car lots. Should I accept one of these unsolicited credit card offers that keep coming my way – not that I want to – just to boost my debt level and hence my credit score? TIA.
Answer: I’m no expert on this subject, but I think that you probably have enough of a good credit history that you’re fretting needlessly. However, if it would put your mind at rest, sure, pick up a couple credit cards. Just make sure they have no annual fee and a grace period on payment whereby the card costs you nothing as long as you pay off the balance every month. Then charge a few minor purchases of things you’d have bought anyway. Once you get the loan you want you can always cancel the cards.
Related Posts
Filed under: Bad Credit Loan
Leave a Comment
XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
TrackBack URL | RSS feed for comments on this post.