Credit score affect on auto loan interest rates...?

I am 24 and just began working full time and making pretty good money. I've had 1 credit card and 2 department store credit cards for over 2 years and have excellent payment history and plenty of credit left on all cards. I just applied for an auto loan and got back really outrageous rates like 15-16% so I went on and checked my credit report and realized I had some problems.

I had two claims from a doctor's offices when I was in college one for $500 and one for $180. I also had a $14 outstanding balance from somewhere and a $200 outstanding with my cable company for failure to return equipment. I think a few of these are mistakes and I am going to do everything possible to get them resolved ASAP but I would like to know worst case scenario if I do have to pay all these, which is about $900 and I could afford to do right now...

What will happen if I pay-off and settle all these claims and then reapply for autoloans, will I see a big difference in the rates I'm given?

Credit score affect on auto loan interest rates...?

Auto finance is what I do for a living and the correct answer is unless you get a pay for delete agreement which simply says that in return for your payment they agree to remove the accounts from your credit the only thing that will happen is your score will actually go down because when you pay them they will become current instead of old accounts.

If the collection companies agree, get it in writing before you pay them a dime.

Credit score affect on auto loan interest rates...?

If you pay them and they update to %26quot;paid collection%26quot; you should see a small jump in your score. if you pay it and dispute and can get one or two removed, it will help more.

No one can predict the exact number your score will climb and then the exact number the rate will be...but if you can get it 30-50 points up (depending on what your current score is) it could make a good impact.

How is it you had %26quot;no idea' that you had no less than FOUR unpaid bills?

Credit score affect on auto loan interest rates...?

I had a similar issue when I bought my first semi-new car. I had old collections, all small dollar amounts, from when I was 18 and 19 years old that were still on my record. I was told by a loan officer that I would need to pay the outstanding balances off before getting my loan. These debts were over six years old and I went ahead and payed them off.

What I didn't know was that it would yield no benefit to me in regards to the interest rate or in any other way. Paying the debts off actually re-started the clock on the collections. I found out later that collections, other than bankruptcy, can only stay on your record for 7 years no matter what you do with them. If I hadn't have paid the $450, they would have dropped off my record in less than six months. But, since the clock on the debts goes back to zero after every transaction, I would have these stupid things hanging over my head for another seven years.

So... you may want to think about paying those debts if they are old.

You could always get he car at the higher interest rate and re-finance when the items drop off.