Need Advise Rebuilding Our Credit.

GetOut

LoanSafe Member
May 3, 2013
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Hi,

Our house was foreclosed on last week.

Our remaining debt is a $3500 car loan. We are able to pay off the car loan at this point, and want to know if we should, so that we can then take the car payments and put it in a savings account ?

Or is it better to keep the car loan open, so that the monthly (timely) repayments would look good on our credit report and help rebuild the loan faster ?

Which option would help us rebuild our credit faster ? We are renting now and do not plan to buy for the next several years, so that is not a consideration for us at this point of time.

Please help / advise.

Thank you !
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
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Southern California
www.loansafe.org
Hello,

Building credit is all about having open credit lines and paying them on time. It takes approximately 2 years to recover from a foreclosure if you rebuild your credit properly. If you pay off your car or other credit, you cannot slowly raise your scores like you would just making payments.

If you do not want to buy anything on credit in the future, do not worry about paying it off. But if you want to buy something in a few years like another home, it is best to have two or three open credit lines with low payments that you pay on time and never miss a payment.