Auto Loans

[yaya03]

I need a new car, does applying for a auto loan affect your credit score?

DH and I do not have terrible credit but we do not have the greatest either. We are in the middle like 660ish

What happens if I do not get approved for a auto loan, is there a timeframe you have to wait until you can apply for another loan?

Where or Who would you recommend for a auto loan?

Do you have any other suggestions for us, should we wait until all of our CC are completely paid off?

Please and Thank you in advance.

[Rich Lunsford]

This is a terrific question. Applying for an auto loan by itself does not necessarily affect your credit score. However, too many inquiries for applications will begin to hurt your credit score. Each time your credit is pulled to determine whether or not you qualify for a loan will make a notation on your credit. If a subsequent loan officer notices that you have been applying for loans all over town, they may get a bit nervous about your financial state and ability to repay the loan. Keep the inquiries to a minimum and you’ll be fine. If you get turned down for the loan, try to wait at least 6 months prior to attempting a new loan. I think you’ll receive the loan for the vehicle. The interest rate may be a bit higher than you may prefer.

In that case, look for a car that meets all your needs but perhaps not all your wants. Try not to finance any longer than 5 years and consider refinancing the vehicle as your credit improves. Remember that this is likely not the last car you’ll buy. Wait for all the bells and whistles until you’re in a better financial position.

Rich Lunsford is a CERTIFIED FINANCIAL PLANNERTM practitioner with USAA Financial Planning Services, one of the USAA family of companies. Rich holds the Series 7 and 66 securities licenses. Rich also holds the designations of Chartered Financial Consultant (ChFC®), Chartered Life Underwriter (CLU®), and CHARTERED RETIREMENT PLANNING COUNSELOR (CRPC®).

Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

[Proud_MPWIFE]

We recently got a auto loan.. only applied through Navy Fed and got approved. It dropped our score, but they say once u make a few payments, you get your points back.. just what I was told.