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Anyone have knowledge in financing/credit?

2K views 11 replies 9 participants last post by  Khyber VT 
#1 ·
So my dad has really good credit. But I have bad credit. He can't co-sign for me because he only has a fixed income. So we're planning on getting a joint loan so we can combine our income, if that's a possibility. Can we do that?

And with the joint loan, whose credit score would be considered?
Am I better off just getting a bad credit loan?

I've been getting mixed information from my Google searches, so I wanted to check if anyone had any insight on this.

NOTE: I am in the process of repairing my credit and paying off debt from mistakes I made out of high school. Just saying, so no one lectures me on how debt doesn't disappear. I'm not planning on buying a car until I've paid off debt.
 
#2 ·
bad credit is going to hurt you whether it's a joint loan or single when it comes to buying things. Any lender will tell you, you need to get that score up. If you have a credit card, put stuff on it and pay it off...rinse and repeat for couple of months to try and get that score up.
 
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#3 ·
You would be suprised how little they care about the income side of the equation. Loan applications care most about your history of payment, which shows in the score, and the amount of outstanding debt you already have, ie house payment etc. Your father COULD co sign with you, however they always put the stronger score as the primary thus it will do NOTHING for your credit if the car payment is always made on time. It merely will boost your fathers further.
A joint loan is essentially the same thing as a co sign, it would likely just require pay stubs and proof of income, which a bad credit loan will also require.
The truth is, you should be working to improve your credit obviously, but there are options out there for that. Don't take on a big loan if you aren't 100% that you won't have trouble paying it every month.
 
#10 ·
This isn't entirely true. My dad co-signed for me with him being the primary due to better score and higher income. Was also able to get a better APR with him being primary. My score is effected by it and continues to go up each month since having the car.
 
#4 ·
Can't speak specifically about the US market but as Khyber said, repair your credit profile. The other thing you may try and do is show the lender that you have a good savings history (make regular deposits into your account). When it comes to loans it's about minimising the risk to the lender. If you can, try and place a significant cash deposit (minimum 20% + on road costs). If you do find an institution that will lend you money based on your history (and even with your father as a guarantor) you will most probably be charged an interest premium + additional fees.

Wish you all the best in financing your vehicle.
 
#5 ·
Go on www.creditkarma.com and monitor your score. I started using that to keep track of my score and in one week my score jumped 10 points. It'll let you know which stuff impacts your score and which ones impact it less. The best part of the site is its all free. If you use your dads credit to get a better rate then it most likely won't help your score when you make all the payments on time. You have to start from somewhere so just use yours and build your credit up for what will help you the rest of your life.

There are 6 factors of a credit score:

1. Credit Utilization- % of your credit limits that you're using. Keep it between 1-20% and you're in great shape. HIGH IMPACT ON SCORE

2. Payment History- % of payments made on time. Missing one or two payments has a huge impact. Keep it at 100%. HIGH IMPACT ON SCORE

3. Age of Credit History- Having accounts open for a longer period of time actually help your score. Rather than closing an old account, keep it open and in good standing and it will help your score. Account age of 8+ years gets you the best score, but its the average of all accounts. So new cards will drag the average down. MEDIUM IMPACT ON SCORE

4. Total Accounts- Having a lot of open accounts represents good credit-worthiness. Having 22+ accounts total open or closed over your credit history period will yield best score. LOW IMPACT ON SCORE

5. Credit Inquiries- Hard credit inquiries are placed on your credit every time you apply for a loan or credit card. Just using credit karma to check scores is considered a soft inquiry, so it doesn't impact score. Having 0 hard inquiries yields top score. LOW IMPACT ON SCORE

6. Derogatory Marks- Accounts in collections, bankruptcies, civil judgements, and liens are all considered derogatory marks on credit. Keep those at 0 for best score. HIGH IMPACT ON SCORE

I hope this helped in deciding what to do. Its good to be fully aware what does and does not impact your credit score. Its best to never have to worry about co-signers.

Good luck!
 
#6 ·
While I didn't have bad credit, I had no credit.
They tried to get me to use the military MILES program at 15% interest. I said f that and took 2 small loans that if I need to I could afford to pay.
What I did was take the 2 loans, I think one was only like 320 abs the other was 863. Instead of using the money I would deposit (using loan money) minimum payment of both + 10% ( 5% for each ) ie. If total minimum payment for both loans together was 100 I would deposit 110.

I don't know if this makes sense.
The loans paid each other off, I just paid interest out loans, ( paying to raise credit) so my regular income wasn't affected.

Went from no credit to low 600s to 778 in 4-5 months.
Besides the loans I had a cellphone bill, and internet. So it didn't take me much.
Though if you defaulted on payments or something it will require more work.
 
#7 ·
yes it's much easier to go from no credit to good credit, than bad credit to good credit. This is why credit is sooo important, unfortunately some people just don't learn/realize that early enough until they want to buy something. Then there is people who got bad credit because of lay-off/foreclosure/repo etc which happens to people unfortunately. It's a recovery process.
 
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#9 ·
Another thing I learned is financing jewelry will build credit fast, because its considered a luxury item. When I bought my wife's wedding ring I had the cash to pay for it, but I financed it anyway. It did wonders for my credit; I am 24 and got offered a 4.9% interest rate for my car, but easily argued down too a 1.9%.
 
#11 ·
i had no credit when i applied for a car loan since i was a recent immigrant. and my loan was in-house at the dealership (through their partners). simply put, they would do EVERYTHING to get you approved, albeit, with a very high interest rate. i had the choice to co-sign with my step dad to get a lower interest or pay it by myself - i chose the latter.

when you co-sign, BOTH of you are responsible for the loan. if you miss a payment, BOTH of you would get hit with a bad credit. for the lender, they like it better because it means they have twice the chance of getting paid back.

are you better with just getting a bad credit loan? it depends. if you think you will be responsible enough and never miss a payment, you might wanna get a joint loan. BUT i would still strongly suggest against it. why? you won't be responsible enough because you know your dad is there to save your pwet. hahaha! plus there is a certain sense of accomplishment and pride in knowing that you are doing it all by yourself and not being dependent on something (or someone) else.
 
#12 ·
don't forget you can always refinance
 
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