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payoff or refinance

The last post in this topic was posted 2141 days ago. 

 

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Hi all,

I moved migrated to US in June 2014. Never lived/worked here before. I applied for secured credit cards with Capital one and Bank of America in July 2014. Both got rejected. They gave me reason round the lines of “profile or file does not exist” (Can’t remember the exact wordings though). Anyhow, I wanted to buy a car, so went into this dealer ship back in August 2014(they claim to be the largest in NYC). Told them I am looking to buy something round $20K in cash. They asked me if I was interested in financing the car. I told them that I don’t have any credit profile, for which they said they ll get the approval. This was my first experience to actually buy a car from dealer ship, and have never financed before. Without asking me they (the dealership) actually applied to all the finance companies they could find under the sun. Then came back with approval, which was $11500 down payment, round 15%Apr for 72 months. The car was (new kia sorento) round $30K+ some nyc tax 0.9% + services. Total was round $34K. The installment was 474$/month. For next month or so, I got bombarded with all those rejected credit applications. I think they sent my application to 14 companies in total. All had same reason i-e credit profile does not exists. With this background information, I got following questions

 

Q1: Currently I owe round $21K. Now the question is, if I payoff half of debt, (round $10K), will that actually lower my payments to 474/2 = 237$ /month? I don’t want to pay off the entire loan as its being useful for my credit buildup (as I understand). I read somewhere on this forum that even if you pay off most of loan, it will go to interest rather than capital payment. If that is the case, I’d rather keep it as is than paying off in full or half.

 

Q2: I was checking free credit reporting sites, and suddenly they have my profile with TransUnion score 655, and another site reporting 690(not sure which bureau they are reporting from). Can I go for refinancing based on this scoring, provided my profile is less than a year old, and already has 14 credit pulls?

Any help will be appreciated.

Thanks,Kj.

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Paying 10k additional now will not decrease your payments. If you have the lender apply it properly it will decrease the total for which you are obligated.

 

Free credit scores are definitively not an indication of your creditworthiness.

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You probably do qualify for secured cards now though, and you should get one or two.

 

Most lenders would likely want more than 4 months of history before approving a refinance. You could ask at a local CU, sometimes you can ask about their general policies without making a formal application and taking a hard pull.

Edited by mk_378

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I dont want to pay off the entire loan as its being useful for my credit buildup (as I understand).

Not really.

 

Installment loans don't do much.

 

You need to get 2 or 3 secured cards asap.

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I dont want to pay off the entire loan as its being useful for my credit buildup (as I understand).

Not really.

 

Installment loans don't do much.

 

You need to get 2 or 3 secured cards asap.

 

 

I got a couple of store cards. They all show up now in credit report. So hopefully things will get better.

But as for car loan is concerned, does that mean if I pay off the entire amount in full, it will improve the credit rating or will it take a plunge ?

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Installment loans help a credit file to mature as they age. A three year payment history would obviously reflect some stability.

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I got a couple of store cards.

Store cards are only marginally helpful.

 

You need at least 3 major credit cards.

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Installment loans help a credit file to mature as they age. A three year payment history would obviously reflect some stability.

So, would OP be best served by making the payments on time for 36 months for this loan? And then looking into more credit products?

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I don't know about the OP particular total credit situation and what would constitute best served. My comment just simply state when an installment loan is open for around 3 years then the consumer receives the max benefit that the particular trade line will give to his file.

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I don't know about the OP particular total credit situation and what would constitute best served. My comment just simply state when an installment loan is open for around 3 years then the consumer receives the max benefit that the particular trade line will give to his file.

Well, OP stated he's a recent immigrant with a very limited US credit history. I'm trying to help both of us learn. This loan is under a year old. It would be hard to refinance, right?

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With the op credit profile as described would you refine it for him at favorable terms at less than a year of payments? . I'd say the banks answer right now would be no as an educated guess

 

Sent from my SM-N910V using Tapatalk

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With the op credit profile as described would you refine it for him at favorable terms at less than a year of payments? . I'd say the banks answer right now would be no as an educated guess

 

Sent from my SM-N910V using Tapatalk

I'd be the wrong one to ask if any one would refinance him. I suck at this credit thing, which is how I ended up here trying to learn more.

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Stick with us. You'll learn

 

Sent from my SM-N910V using Tapatalk

I'm hoping.

 

Marv, I've got a question. Do you know what an Octane Blue Lancer Evolution SE 2010 might would get either selling it outright to a dealer or trading it in? I have GOT to get that car sold. Problem is, it's basically a street legal race car...

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You need to go to a specialty dealer or carfax and see what they say. Check out the pinned topics to get a value on your vehicle

 

Sent from my SM-N910V using Tapatalk

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