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Getting Married, improving credit, refinancing car

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  • Getting Married, improving credit, refinancing car

    I will be married by february, and have been improving my credit score in the months prior to the wedding, to better our future. I had some trouble with credit cards in the past, a combination of college financial rebellion and lack of work for 6 months, but I have gotten it handled, and my credit score is around 700. My Fiance had more trouble, and had stuff go to collections, etc. Last time she checked 6 months ago she had a "575" according to the car salesman where she got her car, but she was able to get it all by herself, albeit at a crappy rate.

    I currently have no car loan, just credit cards, and am at about 50% of my limits right now. I plan on having all the credit cards paid off in about 9 months, but it may be as few as 6 months.

    Should we refinance her car and add my name to lower her rate? (its at 17% now) I figure adding an installment loan will boost my credit rating, lowering her rate will save us thousands in interest.

    OR, should I buy a car for myself first, (mine is starting to wear at 200,000 miles) and with my improved credit score, then go and refinance her car? Or will it be easier to refinance without an additional loan in my name?

  • #2
    What are the rates on your credit cards? if they are less than 17%, it may make sense to pay off the car before the credit card debt.

    If you know that you will be needing a car soon, take the steps necessary to get finances ready for that. Definitely go with a used car that's reliable and buy only what you need for transportation.

    Refinancing to get a lower rate sounds like a good idea if possible - 17% is way too high to be paying. How much is left on the loan?

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    • #3
      Paying off your cards will probably boost your score approximately 20-25 points. Your score may also rise slightly due to having a longer history, and more if negative items drop off your credit report. A car loan will likely reduce your score. Here is an estimator if you want to play with it.

      It wasn't that long ago that 17% was considered preposterous, even for a punitive default rate. You don't really provide enough info to give advice regarding the best way to rectify that situation. I would address it somehow though.

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      • #4
        Maybe you could get a car loan in your name (and good credit score) and "buy" the car from her? 17% is outrageous. I am a big proponent of paying the highest interest rate first, so if that is the highest interest rate, attack that one.

        If your car isn't giving you any trouble, even if it is getting up to 200,000 miles, I would try to pay the other car down first before getting another car payment.

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        • #5
          17% is just a rip off. I don't have any specific suggestions, but I would say to somehow find a better rate, which is definitely doable at that rate.

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          • #6
            Originally posted by cptacek View Post
            Maybe you could get a car loan in your name (and good credit score) and "buy" the car from her? 17% is outrageous. I am a big proponent of paying the highest interest rate first, so if that is the highest interest rate, attack that one.
            Very good idea! Make sure that this crappy loan doesn't also have a payoff fee.

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