I’d love to see a video about credit & Car Loans. We’ve always paid our car payments on time & paid them off on time vs trading them in one a new car - a couple times, we were able to pay off early. In both scenarios our credit took a hit of a 30 to 40 point drop! It took 6 mos to a year for them to go back up. I get that paying the loan off decreases your ‘available’ credit - but car loans are not credit cards, once a portion of the principal is paid it’s not ‘available’ credit to be used again. So WHY do car loans tank your credit once paid off? It’s counterintuitive to me, as paying off something like a large car loan should positively impact your credit - you responsibly paid off a huge debt on time. But we are punished by an enormous credit drop for paying off a car loan responsibly and on time. Is there any way to get around this? And why don’t the credit bureaus correct this ridiculous injustice?
Secured CC can help. Also, check with your bank - most offer a debit-credit card if you have an account that receives regular deposits (paychecks, for example), and if you have no collections on your credit. Plus, try Capital One (not to be confused with Credit One!). Capital One is fairly first time credit friendly, if you’re bad debt and collection free.. They may start you lower around $300-500 credit limit, but use responsibility and they’ll increase your limit. Eventually, other credit cards like Citibank will offer you credit. Capital One’s parameters are to pay off your card to 30% or below every month for five months before they will give you an increased limit. Good luck!
I’d love to see a video about credit & Car Loans. We’ve always paid our car payments on time & paid them off on time vs trading them in one a new car - a couple times, we were able to pay off early.
In both scenarios our credit took a hit of a 30 to 40 point drop! It took 6 mos to a year for them to go back up.
I get that paying the loan off decreases your ‘available’ credit - but car loans are not credit cards, once a portion of the principal is paid it’s not ‘available’ credit to be used again.
So WHY do car loans tank your credit once paid off? It’s counterintuitive to me, as paying off something like a large car loan should positively impact your credit - you responsibly paid off a huge debt on time. But we are punished by an enormous credit drop for paying off a car loan responsibly and on time.
Is there any way to get around this? And why don’t the credit bureaus correct this ridiculous injustice?
Thank you so much! I am learning facts I had never heard before! I am being empowered with knowledge by the minute! MDY all the way!!!❤👏🏾
Great tutorial video!
Thank you for sharing.
Can you do anything when a creditor you've always paid on time decides to close your account because they think you're a risk?
tha
Thank you
How does one gain credit score if they've never gotten a credit card nor taken a loan?
I wonder if you can apply for a secured credit card... Not all banks offer them though, so keep looking. Maybe Google to see some good options.
Secured CC can help. Also, check with your bank - most offer a debit-credit card if you have an account that receives regular deposits (paychecks, for example), and if you have no collections on your credit.
Plus, try Capital One (not to be confused with Credit One!). Capital One is fairly first time credit friendly, if you’re bad debt and collection free.. They may start you lower around $300-500 credit limit, but use responsibility and they’ll increase your limit. Eventually, other credit cards like Citibank will offer you credit.
Capital One’s parameters are to pay off your card to 30% or below every month for five months before they will give you an increased limit.
Good luck!
Your credit score will go down just by using your available credit??