Overhaulin'

I am trying to get a new car loan next year but i have 3 credit cards at a collection agency will if help if?

i pay them off? I also have a car loan with 7k left that will be paid off next year is there a possibility that i can even be approved for a new car. I also have 2500 in savings. i have 2yrs on the same job and my beacon score right now is 598.Are there any loan or sales experts that can help please!

Public Comments

1. anything that you pay off will boost your credit score.
2. I doubt anyone will give you a decent loan with three cards already in collection. How much are you paying that you can pay off $7K on a loan in 12 months? Are you overpaying that loan, and could you reallocate some of that payment towards your cards in collection? Anything you can do to get negative items (and collection counts as a big negative!) off your report will help. Here's a better plan - don't get a new car next year. Pay off your current car, then use the money you had been putting into payments and put it towards paying off your other debts (instead of going out and incurring another huge one).
3. Who is your current car loan with and is it reported to a credit reporting agency? Non-prime auto lenders are going to put more weight into how you have paid an auto loan reporting on your credit report than anything else. If you have paid a financial institution for a couple of years and it reports on your credit report lenders are more likely to compete for your loan and give you a decent rate/deal. Especially with a down payment that puts you (and the lender in case you default on the loan) in an equity position. Hope this helps.