I asked for a specific up-to amount, and was approved by my FCU, for a used-car loan.

My credit isn't terrible, but it is worse than it was 5 years ago.

My question for credit rebuilding is this - I'm approved for up to $8k (for any car 2008 or newer, 75k miles or less, clean title, etc. were the stipulations).  Now if I go and wheel and deal, and find a car that - with my down payment - ends up only using half of that loan amount, am I shortchanging myself by not using closer to the full amount if my primary goal - besides having a second small car (first vehicle is a relatively open old Jeep Wrangler... not great for business travel, but not worth selling/trading) - is to rebuild my credit?

Either way I will be paying off the loan much faster than required.

I ask here because this is business to me, and because I can't find a more applicable finance forum.

Thank you.

Credit Cards can help you rebuild faster a lot of time.  Don't use them keep your spending under 30% of the limit.

No you will be fine. I'd make sure you take at least 6 months to pay it off if your goal is credit building.

I keep one open credit card that I utilize on occasion for perhaps 30% of the limit and pay it off before the month is out.

Besides that I have a house payment.

My credit generally stays right around the 740's.

High enough for my purposes (the only use I have for credit is the occasional free flight to Europe that my wife earns by opening specific cards for specific short terms and a future house refinance).

Thanks for the replies, guys.



And I have heard that.  In fact, when I went to my bank about two years ago to specifically ask if their credit card would improve my score, they assured me that it would.  Unfortunately, it doesn't seem to have changed anything.  

Maybe I need a non-bank credit card to do that instead?

Another thing you should look at is the interest rate of the loan. If it's in the 0-3% range it's basically free money and you would be silly not to use the leftover to pay down any other debts you have at higher rates

Believe it or not, I don't have anything else pending besides a student loan.

I'm not in the hole, but over the last ten years it is more about me just not using my credit.  I actually had to contact my old bank to send proof that I had a car loan, and paid it off, since my credit report showed nothing.  It was either that, or I would need a co-signer ... which is a bit ridiculous considering my age.

I was looking for cheap fords (Focus, Feista, manual transmission, used and at a good price), but just found a 2008 police car with a clean title and okay miles that I am going to go look at tomorrow.   If it drives well, I will have no problem driving it.  Boring, yes, but for the price I can barely say no if its as clean as it looks in the photos.  I'd rather get a police car that had its oil changed regularly than take a chance on the piece of junk Focus I looked at today.  68,000 miles, but looked worse (steering wheel degrading already?).

Then... there is THIS craigslist gem that I e-mailed for info for... She had the car listed as a local sale with one picture, but none of this was in the description - she only e-mailed me to tell me about it.

Sounds like a scam.  No easy way to verify it isn't a scam other than calling up the base.

"Hi,

Thank you for being interested in buying my 2012 Chevrolet Cruze:
- 4CYL  1.4L - (engine runs great)
- Automatic (shifts smoothly)
- Original Set of keys with remotes - 2 sets
- Clean title and carfax report
The car  has been extremely well maintained with a full service history and has not been involved in any accidents. Only 29,510 miles.
I bought it when i was serving in Eglin AFB, Florida but i was transferred to Hickam AFB, Hawaii for a 3 years period.  I priced the Chevrolet for a fast sale because i have an unpaid mortgage and I risk to loose my house from Hollywood, also I do not want to let it ruin in the parking lot for the next 3 years.
The car is already at our Military Logistic Department from Eglin AFB, FL U.S. Army crated and ready to go. The shipping will be free for you because I will transport it using the Internal Logistic Department! The Logistic Department will deliver the car to the nearest U.S. Army base from your area and from there i will use a tow-truck to have it delivered at your door. The whole shipping process will take 2-3 days.
The financial part will be managed by eBay which means that you will have a 7 days inspection period before committing to buy the car. In this way both buyer and seller are 100% covered during the steps of this transaction.
The final price is $4.000 which include delivery at your home address. If you decide to buy my car email me your:  Full Name ,Shipping address ,Phone Number so I can inform eBay that  I have  a buyer!  I will forward your details to them and then you will receive an invoice (with no further obligations or fees). Then you will be able to talk with them directly and ask all you want to know.
If you need further information or pics please get back to me as soon as possible!

Thanks,
Lt XXX XXXXX"

Scam.

the only thing that actually helps your credit rating is time. borrowing money helps, borrowing more doesn't. you want to owe less than 30% and ideally less than 10% before applying for more.

this is an oversimple example; say you had no debt and could borrow up to 9000 for the loan. basically u can take the full 9k but until u pay (6k) it off below 3k your credit is shot and wont be able to get another good loan till then, but if you only borrow 5k then after only paying 2k youll be in the same position.

and to get the best loan rate (the ones u see on tv) you want to be below 10%.

ps, order your credit report and contest everything, valid or not, your not making payments on. being ruthless about your credit will get you farther than being nice.


so back to your question about cars, your better off buying a cheaper one now, make payments for a year then buy the second as far as credit rating goes than to buy 2 now.

Thank you.

Instead of all of what I thought was going to happen, I accidentally got a little too truthful with my credit union, and now they refuse to give me the loan until I show pay checks from the new job.

...

So I've shifted gears and went looking for a used car to buy with cash.  Once the paychecks start coming I'll apply for a personal loan - just to use that same money to pay it back.  it's ridiculous, but if I have a running car (other than the Jeep), then I really don't need a used car loan after that point.

So a personal loan for no reason is the plan now.  

Why are you so worried about your credit score if you can pay cash for stuff?  

Bad credit and no credit are two different things. As long as your report is accurate, don't worry about it.



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Because my new job will be requiring me to buy a brand new truck by the year's end.  It makes no sense to go into that, knowing it, without the best credit score I can attain by that point.