db2012

Yeah the C32 2002 for me was 130/month full coverage, I was paying 115 month previously for a 97 cavalier with the cheapest coverage. But you make a good point, but its not too bad for me. I just turned 25 so I get a decent break.

db2012

Wow this is great advice, very detailed tips thank you. I like your optomistic mind set, I don't think its a big deal for me getting this car once the collection is removed, I think I should be good. I wish they used your last recent pay periods to factor your income rather then previous tax year. Last year I was still in school so I only worked part time for little pay. I recently got a promotion and am making much more then last year, but I'm going to have to wait at least 14 months for that to effect me or no?

flush

That won't do anything. As long as you can show proof of annual income/employment, that satifies requirements. A car loan score is usually slightly higher than a normal FICO score.

zoink has good points but even if he has 90% credit used up on 1 card, it's overall credit availability that's the key factor, not individual card usage. He's fine because he has high limits (in total).

Make sure all correspondence to credit reporting agencies are done via Return Receipt post (can't do it online since you need to send in proof of the invalid collection, do not rely on someone else to fix it for you). You need that green confirmation card to follow up on if nothing happens. 3 months is optimistic - they state it takes minimum 90 days to respond. Double it to 6 months (you will receive a copy of your new credit report once it is corrected, in the mail).

When you do dispute the collection, dispute anything else that is inaccurate on your report, get each credit report agency to fix everything. Itemize each correction in your letter. Keep copies of what you send out along with the return receipt card (and dates sent).

A collection is probably worth about 50 points. What's killing your score is credit utilization at 65%. Drop it to below 20%.

You seem very fixated on a car and less on solving your credit problems. Take this advice from a guy who had a FICO of 515, clear the student loan completely. There's no point in refinancing the loan if your credit score is still in the ****ter.

Next, clear the collection (pull a credit report from each agency, transunion, equifax, experian - ignore the 3-in-1 reports, pull each individual report, write a letter to dispute the collection and provide proof, you will receive an acknowledgment letter within a month and several more before it gets wiped out)

It takes time for your FICO to bounce back, many months. Check your scores every 3 months for changes.

Hard inquiries (credit check reports) like when applying for loans, do count. A few inquiries within a short time span that is obvious (car loan, mortgage) will be negligible but it doesn't mean that your score won't be reduced slightly (-10, 20 pts)

I'm not going to mince words here. What you think so far, isn't working. That's what got you into the credit mess you have now. Listen to the words of people who have been financially more successful (than you) and heed them.

The car will still be around. Insurance isn't the only thing to consider. Gas, upkeep and repairs (include extended warranty costs)

spr

Another interesting thing I have heard is that if you are shopping for the car loan do all inquiries within 30 days and they won't negatively impact your score as they will be all done for the same transaction-

CarlssonPower

No offense, but I think you should pay off your student loan first then worry about your fancy ride

zoomie

yeah, no kidding.

db2012
WHAT YOU REALLY NEED TO KNOW:

1. YOUR BALANCE SHOULD BE ZERO.
Your debt is over $11k when your balance should actually be $0. Do NOT keep a balance on your accounts. You should owe absolutely nothing at the end of each month. Pay off everything you owe each month.

2. HOW IS YOUR CREDIT SCORE CALCULATED?
Credit is reported based on a ratio between your credit limit and how much credit you actually use. If your credit is $5,000 per month, using $1k is better than using 2k. The closer you get to the maximum, the worse off you are. SOLUTION 1) Spend less 2) call your credit card comapany and ask them to raise your limit. By the way, do NOT cancel any of your credit cards. Doing so will also cancel good credit you may have accumilated.

3. WHEN PAY SOMETHING OFF VS. PAY IN MONTHLY INTALLMENTS:
For everything you buy excluding big ticket items like cars and houses, you should be able to pay in bulk. The only reason you should choose to pay in monthly installments is to increase your leverage.

The interest that you're paying should be LESS than the interest you are EARNING by NOT paying. If you can earn more on the money than the amount you owe, keep the money and make money. e.g. Let's say you're earning 8% on your money. Why pay off a 5.5% loan on the same amount if you can make the difference of 2.5%? If on the other hand, you're being charged 4% on something, while you're only earning 2% on the same amount, you're losing 2% every month. Got it?

4. YOU HAVE LOTS MORE TIME:
Look foward to the c32. No need to have it now. You already have a Mercedes. Keep your money, pay off debt and then improve your lifestyle if you have money left over.

5. GET YOUR PRIORITES STRAIGHT:
Pay yourself first. Declare a certain amount to transfer monthly from your checking to your savings account. Use whatever's left for your expenses. Don't do it backwards and gather up expenses and save what's left. You'll find you'll end up with nothing to save.

Jons95c36amg

My credit history is only 8yrs old. But I always pay on time and never leave a balance on my 2 credit cards. You don't need more then 2 cards. My credit score is a 760.

cdd

+2

It's much more enjoyable when you know you can afford it--and you're not stretched thin by car payments.

zoomie

I'd honestly rather have a cheaper car with all the options I wanted and money left over for mods than a supped up stock car. Imagine if this guy bought a c230 kompressor coupe instead. He'd save a ton and have a gillion dollars to spend on custom modifications.

mbclk55amgguy

you need to give my guys at mercedes benz of tampa a call. they got me into a 05 c55 amg with 3k down and a 617 credit score. they have 2 silver 05 c55's left, and can find you a c32 if you want. they are awesome. like i said, i went through a divorce and have 6k in collections on my report with a 617 score and they got me into a 35k c55 with 3k down.

amir05us

It is very hard to go into a bank to get a loan without a dealership to apply for you. When they try to sell you the loan don't take it. Tell them you want a better rate, (they are trying to make money on the back end.) Honestly your credit isn't too bad, I finance home loans and settle consumer debts so I look at credit every day. But you definitely should have your fico score pulled by the dealership because the free online credit report can be up to 100 points off. By the way.. I wouldn't mess with your collection. The issue is you have already lost points on your credit report because of the collection. As time goes by those points come back as long as you pay other accounts on time. The second you call the collection agency to start making payments that old collection account becomes active and you lose points again.

V12Godspeed

this is weird, if you pay the collection wouldn't it come up as settled and will no longer be a negative factor on your report?

xlr8tin

Credit Unions are a pretty good place to get low interest loans....But the fact is what everyone is saying...wait...pay somethings off. Than buy the car. Who knows, down the road you may decide you want something else.

flush

That's another problem in the way the system works. Paying off a collection does not help your score.

However, if you negotiate (and get it in writing) to pay and get them to remove it from the report, you'll be fine. Not supposed to work this way but you want it off your record, they want to get their money back, it works.

Chappy

Make getting out of debt and cleaning up your credit score your main priorities. Once accomplished, you'll be able to (1) take advantage of opportunities that are presented to you and (2) obtain the Tier 1 credit you'll need to take maximum advantage of those opportunities.

Good luck!

s4avt

I don't know why you guys keep telling him to sell his stock, this is the worst time of the year to sell stock.. I rather keep it and not buy vehicle either... wait untile market gets better

Slater126

Right. The best advice. Probably not exactly what he wanted to hear but he should seriously consider forgetting this type of car for now and instead pay down his high interest debt and build his credit -- and maybe even invest in property after the real estate market declines a bit more. I'd also hold on to the stock if possible or, if I did sell it, at least apply the proceeds to the student loan.

As we all know, even once you've managed to buy a C32, the costs sure don't end there! They're very expensive to maintain (a spark plug change on one of these things is over $500) and they use a lot of premium gas at $3.50+ per gallon. Plus, C32s and C55s are depreciating fast. It's not like they're going to get more expensive any time soon. Wait a couple of years and a decent '04 C32 will be a $15k car.

If he feels the "need for speed" there are a lot of cheaper options out there to get him by for now. How about a $10-12k E36 M3?

evanswan

I agree with this statement. Your score needs to be 680 to hit approval for decent interest rates. Your colleciton needs to come off. Keep your student loan for credit histroy. Lexington Law firm can help get your collection off your report. P.M. me if your curious. I had a 580 years ago. Bought a Lincoln LS at 16% and 10k down. I was foolish and young and wanted the car really bad. I made 90k a year at the time, but they would only approve me for 25k and I had to put a huge down. I fixed my credit within a year to a 720. Refied the Lincoln to 4.5%, bought a c32 at 5% and a house a year later after I got rid of the lincoln. Now I want to sell the c32, it's out of warranty and averages about $1600 to $1800 a year by my calculations to maintain and keep fresh rubber on the car.