Car refinancing can improve your credit

Tara Baukus Melloq_v2.gifDear Driving for Dollars,
I want to refinance a car that I am paying for, but it is currently in my boyfriend's name. I want the credit companies to know I'm making the payments since I know it will improve my credit, but I have very bad credit. Can I still refinance and have the car in my name?
-- Ashley

a_v2.gifDear Ashley,
You are right in thinking that your credit would improve if this car were in your name and you made the payments on time. But it's unlikely that you'd be able to refinance and get a similar interest rate if your credit score is much lower than your boyfriend's score.

Still, exploring what interest rate you could get is a good idea. Check with the current lender as well as a few others. However, the most realistic option may be to refinance this car with your boyfriend co-signing the loan. This will likely get you a better interest rate than if you were the sole person on the loan. And it also will mean that the payments will be logged as part of your credit. Once your credit improves, you'll be able to get an auto loan with a better interest rate on your own.

If you have a car question, e-mail it to us at Driving for Dollars.



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