Loan/Credit Score Advice

Nukes_2

Hi.

I am looking to buy a car very soon and would like to take out a loan to pay for it. I am single, renting, full time employed, £18,500 pa. My credit score is moderate due to me not being a home owner and my mobile phone contract is my only credit agreement at the moment. I have no adverse history.

However, I applied for a credit card about 2 months ago (which was declined because I wasn't on the electoral roll at the time).

My question is, should I apply for a store card or similar to boost up my credit score before I apply for a personal loan (I'm thinking of Nationwide). This may increase my chances of acceptance for the loan, but on the other hand it will add another search onto my history. But then, if I'm declined for the store card, it won't boost my score AND I will have the extra search.

This is sooo confusing!!!!!

Hope someone can give me some advice.

(By the way, I have some money which I inherited, which I don't really want to break into as I'm saving it for buying a house... unless anyone can give me better advice!!)

Thanks.

Old_iron_balls

Hi Nukes,
If you take out a loan your going to be paying interest.
If your credit rating isnt too good, alot of interest. Why burden yourself
If you have the cash id use that and buy it outright.

As for improving your credit worthiness, if you can get a credit card and pay it off in full each month this will improve your lot.
Just dont go mad on it or you will end up with a sig like mine below ! :rolleyes:

Nukes_2

Thanks Iron Balls!!

I guess your advice makes sense.

I suppose I wanted to keep as much as I could for a mortgage, but if I end up paying over the odds on a loan fo a car, I'm losing out in the long run.

I might just see what loan rate I would get accepted on anyway, just to see where I stand in the credit scoring world. Once they have accepted you, is that when the agreement starts or can you decide against taking out the loan at that point?

Thanks.

andymac746

If you take a loan out for the car and then want a morgage the outstanding loan amount will affect the amount of morgage you can have.

Nukes_2

Hi andymac.

So you're saying that when I apply for a mortgage and I already have a loan for a car, they will limit the amount of mortgage I can have because I already have the other loan?

So it's definitely a better idea to buy the car with cash even though it will leave me with less money for a deposit on a house?

Sorry if these are elementary questions, but I'm finding all this credit/loan malarky really complicated. I really appreciate your help!!

Thanks.