I worked two jobs throughout high school and continued to save money the years after. My parents taught me how to manage my money so I wouldn’t make the same mistakes they did. They gave me the family minivan and that’s how I made it from point A to point B. I bought my dream car, a 1995 BMW E36 M3, for $4,400 cash when I was 19. I put about another $3,000 into it in terms of corrective maintenance over the course of a few months. I will never forget the feeling of accomplishment that I had received after I turned the key and the car was alive again. All of that hard work paid off. That was, however, until I was accidentally ran off the road and had to go a different route for the time being. I sold the car for $1,000 and used that as a down payment on my current vehicle. I moved to a new area and the cost of living was much higher than what I was used to. I went through financial hardships because of it. I had never been intentionally late on a payment and if I ever caught myself unable to make a payment I was sure to let my bank know prior and I would make the payment soon after I was paid. My credit score dropped from about a 728 to a 650 due to me opening two credit cards, a personal loan, and financing a car. Flash forward to 2018, I decided to marry my high school sweetheart. I took out a small personal loan to get her a car. To add onto my the chaos we were going through financially, I had an issue with my paycheck. I wasn’t being paid the full amount I was supposed to be making and it led me to use my credit card as my sole form of payment for purchasing furniture, groceries, etc. I was supposed to be making $4,700 a month, but I was only living off of the $2,200 a month they were paying me. After all of the monthly bills were paid (phone bill, loan/credit payments, car insurance, rent, her student loans, etc), my wife and I were sitting at about $120 a month between the both of us. I had $38,000 worth of debt. We really didn’t have a social life at the time as we spent most of our time at home trying not to use gas or spend money. My paycheck was corrected and my job had reimbursed me for the almost $14k they owed me. I wasn’t thinking at the time about the consequences, but I just wanted to pay off debt. I paid off both of my personal loans and put money into my credit cards. I was then sitting at $28k in debit between my car and the remaining balance on my cards. My credit score dropped from about a 650 to a 580 in what felt like over night. I was siting there dumbfounded. So, here’s where my question comes into play. I found a another E36 M3 with only 66,000k miles on it for a great deal (about $16k). I could talk him down on the price a bit. I could pay some of it in cash and would have to take out a loan for the rest of it, but this is an opportunity I really don’t want to pass up. My wife is on board with it as she knows this is something I’m passionate about. She would take my current car and we would sell the one she currently drives. Money is not an issue now as we both have steady jobs and our new place is much cheaper than where we used to live. The only thing holding me back from going to apply for a loan is my credit score. It’s been like this for a month now. I have a feeling I will be either denied or I’ll receive an insane interest rate.
•Why did my credit score drop so much after I paid debt off? I knew it would drop a little, but that’s a huge dent. •When should I expect to see it go back up? Will it ever go back up? •Should I try to take the loan out anyway?
I know it sounds crazy for me to even consider taking out a loan right now as it’s too soon after my score dropped, but I guess that’s why I’m here asking. Cars are something I’m passionate about and like I said this is my dream car. The value of it only appreciates from here so if I don’t get it now then in 5-10 years the price could double for something like this. My wife and I have been through a lot with all of this and it would be nice to do something for us for a change. Thank you for any advice and inputs.
Submitted November 18, 2018 at 05:44AM by SwearBear56 https://ift.tt/2FrcXRq
