can paying my mortgage loan on time help my credit score…and other financial questions…?

Deal Score0

ok…so last time I checked my credit score (about four months ago) it was 609. I do have a few debts from my past. All the debt I owe adds up to $ 1500.00. I plan to pay this off soon, but just haven’t got the money yet. Everything I owe dates from two years ago and later. nothing recent. Well, I got a loan for my trailer with a co-signer two months ago. Have made my payments ontime. Well, will this help my credit score at all? How long will it take to help out? I just recently wrecked my car and I got $ 2000 for it totaled. I need a good reliable car so I can go back to work. I need a car loan BADLY!!! Not much maybe 9-10K at the most but definitely willing to take even lower than that! I would go as low at $ 4500-$ 5000. I have two kids and really can’t get some cheap car that’ll break down next month. How can I get an auto loan with a credit score of 609. Do you figure it’s gone up any since four months ago? Please help!!! I am 21 and should know more about this stuff, but I have no clue about the whole credit and loans thing. Any info would be EXTREMELY helpful! Thanks again! Take care everyone and God bless!
ok I never told any of you the debt so…I HAVE NO CREDIT CARDS!!! also ALL of my debt comes from 1. when I was pregnant with my daughter I had medicaid to cover all expenses. I was also on my mom’s insurance but it wouldn’t cover me beign pregnant so i got medicaid. i kept have probs with medicaid paying and would get bills and have to call medicaid and say “hey you need to pay this bill” and they’d do it. well some of my last bills I kept putting off and forgot to tell them about so now it is up to me to pay. they are 2 years old and i doubt med pays now. then 2. i had an iphone and lost it. I kept looking for it instead of reporting it, so when someone else found it I had to pay the charges they ran up. My fault completely, but don’t tell me not to buy somethign I can’t afford. My debt has nothign to do with that! thanks to everyone though. FYI That isn’t supposed to be as rude as it looks lol!
Oh and I don’t mind a high interest rate…also did I mention the $ 2k I have right now? that’s the down payment!!! anyways…just thougth I’d add

  1. Reply
    David B
    April 30, 2011 at 12:37 am

    Your credit score is from 4 months ago, but the loan for your trailer happened 2 months ago. Your score has probably dropped due to the inquiry and the increased debt to credit ratio (e.g., higher credit utilization). You should get a new credit score to see where it is now.

    Time will slowly help your credit score, but I think 2 months is too short of a time for your score to have recovered. No one knows the exact formulas for calculating credit scores (since they vary between credit bureaus and are guarded secrets), but I think maybe in the next 2 to 4 months, you’ll be back on track.

    You may have to get a co-signer for the car loan, unless the dealer is able to offer you a loan (with probably a terrible interest rate). If you bank with a credit union, check to see if they offer auto loans. They usually have better interest rates, and some will even help you find a car based on your specifications.

  2. Reply
    Albert L
    April 30, 2011 at 12:58 am

    For being 21, you will have an awful time of getting approved for any loan if you don’t make a lot of money and/or putting down a huge down payment.
    A score of 609 is not high at all and should have room for much improvements. From the sounds of it, I would suggest you to pay off your credit card bills, and keep your balances low. Stop spending money on things that you can’t pay back.

  3. Reply
    April 30, 2011 at 1:17 am

    Eventually your on time mortgage payments will improve your score … but not after only 2 months. Your score has probably dropped since the mortgage was added to your credit. Mortgages tend to be large debt and that’s all brand new which works against your score. In about 5 to 8 months your score will start to rebound.

    Paying off derogatory items on your credit report will not improve your score. The damage is done and will remain for the balance of the 7 year period, whether paid, settled, or unpaid. The amount doesn’t make that much difference. It’s the number of defaulted debts that cause the damage.

    When you do start working on settling these old debts, you may as well negotiate settlement for as little as you can — 25% to 50%, depending on how old the debt. Get any settlement agreement in writing and don’t give the collector direct access to your bank account.

    You are going to have problems finding a car loan. You may need a co-signer but even that won’t get you a very good interest rate. You might be much better off taking that $ 2K and buying something with cash. Wait till you’ve paid on that new mortgage for a year and have actually improved your credit before you take on a car loan.

  4. Reply
    John Kyle
    April 30, 2011 at 2:08 am

    To improve u r score:
    # Monitor your credit report and dispute errors. Errors in your report will usually translate into a low score.
    # Pay your bills on time even if it means you can only pay the minimum amount due.
    # Low balances are a positive factor in scoring models. Don’t use all your available credit.
    # New credit applications can detract from your score. Even an application for a department store card can lower your score. Multiple applications can have a devastating effect on your score, especially around the time you are shopping for major purchases like a car loan or mortgage.
    # Old accounts (even those you haven’t used for a long time) can help your score. Scoring models look at not just how to use credit today but also how long you have used credit.
    # Consolidating balances or moving debt around may make for one easy payment, but this can have an adverse effect on your score. Shuffling of balances could be especially harmful to your score if you close established accounts and open new accounts to consolidate your debt.
    # Ask your lender what scoring model it uses. With new scoring models like the credit bureaus’ VantageScore, it is easy to get confused. A number score alone will not tell you where you stand.
    # Know the going interest rates. Current rates for mortgages, car loans, and other consumer credit are published in daily newspapers or can be found online at such sites as If you have a good credit score but are not offered a good interest rate, ask questions, negotiate, or shop elsewhere.

  5. Reply
    April 30, 2011 at 3:02 am

    You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments –

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