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Will trading in a car I bought last year for a new one negatively affect my credit rating?
I am not satisfied with the vehicle I purchased in 2006. I want to trade it in for a different one. Will this have a negative effect on my credit score? I plan on purchasing a home in 2008 so if it will have a negative impact on my credit score I will keep it until my home loan is secured. Please only serious replies.
Last year when I was leasing a Townhouse, the people at the financing office said that it showed up negative on my credit report that I took a loan for a 2007 vehicle. They even told me hold off on buying any more new vehicles. My concern is, will trading in the vehicle cause another negative mark? I am purchasing a home in 2008, but I do not like my present vehicle due to poor performance.
3 Answers
- Anonymous1 decade agoFavorite Answer
The only thing that will effect your credit is late payments. Staying in debt actually looks good on your credit..as long as there are no serious delinquencies. It is harder to get a loan if you have no debt.. go figure.
- The ScorpionLv 61 decade ago
I don't know of any reason why it would hurt your credit, but in most cases unless you have a pretty good part of the car paid off you are going to find yourself "upside down" when trying to trade in after just a year. That means the total debt on the car is beyond what it's actually worth so that you would have to add a significant amount of that debt onto the price of the new car making it far too expensive to make the trade.
- monteagudoLv 44 years ago
right here's a tidbit that maximum human beings don't be attentive to. Your credit is majorly effected by potential of the ratio of debt owed on your severe stability. (i.e. in the journey that your mastercard had a $2000 shrink, you do no longer choose to run the stability up over $a million,000). 50% is a sturdy shrink to stick to. in case you purely paid your stability down below 50% it is going to rather advance your score which probable dropped everywhere from 20-60 factors once you purchased the motor vehicle. I had a customer that had a motor vehicle that they only owed $5000 on and had offered it for $15000 and that they traded it in for a clean $25000 motor vehicle however the fee replaced into rather decrease on the recent motor vehicle and her credit dropped virtually one hundred factors, as a results of fact the stability she owed replaced into $25000 of the $25000 she borrowered. ok, i'm ranting... yet specific, it is going to advance your credit. Oh, and not all lenders care in case you have 3 open commerce strains... maximum do no longer anymore till you attempt to do reported income or a area of interest product like that. desire this helps!