Hi, I have a crappy credit score. I was recently interested in purchasing a new to me vehicle. Talks with the credit union resulted in some distressing information. For a vehicle loan they want to charge me around 10% interest. Outrageous in my opinion. I have not gone to a dealership yet so I do not know what their interest rates are for folks with my score.
Some generic background. All bills are setup with automatic payment. I am never late. The only revolving lines of credit I have is a charge card with Home Depot that I used once to buy a new washer and dryer. I paid them off early (mistake, hindsight is 20/20) and have not used it since. I have taken out several small loans over the last few years from my credit union. All were under 3 grand and we're for fun stuff like vacations and big boy toys. One was paid off early (hindsight) and the others were all paid as per the terms. 7 years ago I had a vehicle repossession due to a layoff. That must be a big part of the problem. I also think the fact that I generally do not finance things is an issue that has risen to bite me in the butt. I usually just save up and buy outright. Don't like payments or living beyond my means. But I cannot afford to outright buy the vehicle I would like... it costs too much! I am not about to cash in my retirement funds for a truck!
So far I have been told to:
Get a credit card, use it and pay the balance off every month.
Go ahead and finance at +/- 10%. Make payments for a year and then refinance at a lower rate. Rinse and repeat.
Quit dreaming that a young man with a stable, well paying job should be able to have a nice ride. Those are for the welfare rats and wealthy folks.
So, I am asking all you experienced people. What is your advice? I can easily afford payment. I balk at that interest rate. Am I crazy? Give me tips and tricks on how to do raise my score. Or have I already been given the proper advice?