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You sound like your 16. Most of these questions can be google or common sense kicks in.
Most don't have several 100k's laying around...it is perfectly acceptable to get a loan and pay it off in 15-30 years. Otherwise most Americans wouldn't even own homes. Do you think your Average Joe has 100k let alone 350k for a house outright? Not at all.
It is usually better to make payments say on a car loan or a school loan than pay 10k all at once after you get the loan. Anybody can get a 50k inheritance and pay down a 30k car loan or school loans it is quite another to pay above the minimum payment for 5 years to pay it off. Nothing wrong with throwing chunks into it, but it questions where did you find 15k for that car loan payment if you just pay it off after 6 months of a 5 year loan.
Sorry I don't have time to answer the other 394 questions....Google is your friend.
If all you got from my post were those 5 words...then yes.
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I didn't.
Quote:
It is usually better to make payments say on a car loan or a school loan than pay 10k all at once after you get the loan.
Ok so any loan I take out from now on should be paid on as long as possible. It's funny because my default is to pay off a loan as soon as possible because I hate being in debt. I made that mistake with buying my first car....I just paid it off when I had the chance because I didn't like the idea of a guy half owning what I needed.
They really should teach this stuff in high school and/or college. Some of us don't know how it all works...we don't have the benefit of parents/guardians/mentors to tell us how it all works.
(Also, I've tried googling it, but you wouldn't believe the amount of contradictory information I've come across. It's very frustrating not knowing who exactly to talk to or believe. I mean, at the end of the day, it's my money and everyone else wants it....so you don't know who is who. I kind of trust people on here more because they seem to know what they're talking about...)
Ok so any loan I take out from now on should be paid on as long as possible. It's funny because my default is to pay off a loan as soon as possible because I hate being in debt. I made that mistake with buying my first car....I just paid it off when I had the chance because I didn't like the idea of a guy half owning what I needed.
They really should teach this stuff in high school and/or college. Some of us don't know how it all works...we don't have the benefit of parents/guardians/mentors to tell us how it all works.
(Also, I've tried googling it, but you wouldn't believe the amount of contradictory information I've come across. It's very frustrating not knowing who exactly to talk to or believe. I mean, at the end of the day, it's my money and everyone else wants it....so you don't know who is who. I kind of trust people on here more because they seem to know what they're talking about...)
Thanks.
Pay it off as soon as you can because you will pay less in interest each year. I'm basically saying it is better to have some kind of loan on your credit because it shows lenders that you can make payments for years to come. Since you will be paying your school loans I don't see a problem. Sure 30k in student loans will put a damper on your credit score, but in 10 years they will be paid and it should rise dramatically.
Here's the situation....my credit score a couple years back was in the upper 600 range. Considering I was a college student with little history and massive amounts of loans, I thought that was pretty good.
Then I went over my head....there are about four things in collections right now, or that may be in the future. A total sum of less than a couple thousand. Seeing as I am in college, money like that doesn't come along too often. But, all should be paid within the year.
Now my credit rating is in the mid 500s. I'm still young so the goal is to build enough of a credit rating so I can look into getting into a house by my 30s...
That, coincindentally, is about the time those blemishes will fall off my report.
But, I want to both solidify that standing, and speed it up if possible.
So, tips?
Here is one thing that you can do. You may have to see if your bank offers this or will work with you on this.
Save up $2,000 and place it in a savings account. Ask for a loan from the bank for the $2,000 secured by the savings account. Take the money from the loan and pay off your loan over time, lets say 12 months. If you can do this at a couple banks feel free to do that as well. Maybe two loans for $1,000 each at seperate banks.
Other than that, pay your bills on time, pay any recent collection accounts that you may have, if you have any that have been in collections for more than 6 years, let them go. Do not pay or make a payment plan. I would get a copy of your credit report to see where you are at. Any recent blemishes can be cleared up by biting the bullet and paying them off. Over time they will wash away and if you have to buy a car or a home before that happens they will show up as paid off. When we were buying our home we had a few small things that the loan officer wanted us to clear up. We did that and it was no problem. Many times it just depends what it is on your credit holding you up.
What ever you do from hear on out, just pay off everything on time. Eventually time will clear the offences up and you will once again have clean credit.
Pay it off as soon as you can because you will pay less in interest each year. I'm basically saying it is better to have some kind of loan on your credit because it shows lenders that you can make payments for years to come. Since you will be paying your school loans I don't see a problem. Sure 30k in student loans will put a damper on your credit score, but in 10 years they will be paid and it should rise dramatically.
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No, it won't. It could potentially put a damper on your back-end ratio for something like a mortgage or car loan where they look at debt-income ratios though. Alone it wouldn't, but in conjunction with other debt like credit card and car payments it could.
Having a lot of credit is good. Using a lot of credit is good. Using 80% of all the credit you have is bad. 10-20% would be much better. Ask to have your credit limits raised if you need to. Having multiple credit cards is good. 7-8 is about average. Opening multiple credit cards at nearly the same time is bad. Charging a lot at the same time is bad. Closing a credit card is bad. Instead of cutting up an old credit card, go charge something with it. Having credit cards as the only basis of your credit record is bad. But as everyone has said, the most important thing is your payment history. You don't have to pay everything off all at once, but you do have to pay everything off ON TIME. Otherwise you go to the back of the line. Also, pay your parking tickets and any library fines (these can end up at collection agencies), and don't get new credit cards for special store discounts then never use them again. Those will put your credit score on the down elevator. Assuming your payment history has been good, you can ask internet, phone, and other utility providers to report your payment history to the credit bureaus. Many won't, but some will. Broadening your credit history will help your score. If you can, try paying your credit card bills at least two weeks before their due date. That''s when credit card companies typically report your account status to the credit bureaus. Getting current month payments reflected in current month reports will improve your score.
pay off your debts, keep your credit accounts so that you establish a good history, and never make a late payment again. if you're still in college, you're likely < 22. if you want to buy a home in your late 20s, your college blemishes will hardly be impacting your score by then. It's what you do from this day forward. You can't eliminate the blemishes faster other than by settling them faster so the clock starts ticking sooner.
it's a simple answer.
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