Does having 2 car loans hurt your credit?

Yes, having two car loans can hurt your credit by increasing your debt-to-income ratio and adding hard inquiries when you apply, but the long-term impact is positive if you make consistent, on-time payments, demonstrating responsible credit management. Lenders look closely at your ability to afford both payments, so strong income, a good credit score, and low overall debt are crucial for approval and minimal negative effects.

Do multiple car loans affect credit score?

Most credit scores count multiple hard inquiries from auto loans that happen during a short period as one hard inquiry for scoring purposes. But the specifics depend on the type of credit score. FICO® Scores: Newer FICO® Scores treat multiple auto loan inquiries that happen during a 45-day period as one hard inquiry.

What is the 20/3/8 rule for buying a car?

The 20/3/8 rule is a car-buying guideline from The Money Guy Show, suggesting you put 20% down, finance for no more than 3 years, and keep total monthly car expenses (payment + insurance + gas) to under 8% of your gross income to maintain financial health. This strategy helps you avoid overspending, depreciation, and getting "upside-down" on your loan, ensuring your vehicle supports your budget rather than burdens it.
 

Is it bad to have two car loans under your name?

Keep in mind that having two car loans at once typically means higher auto insurance premiums. Your credit score could also dip when you apply for financing, making it more challenging to qualify for credit in the near future.

Is it a red flag if a car has multiple owners?

Having multiple owners isn't an automatic red flag, but it depends heavily on why there are many owners and how the car was treated; a short-term, rapid turnover of owners is a major warning sign of hidden issues, while a well-maintained car with several owners (especially older ones) can be fine, with mechanical condition and maintenance records being far more important than just the number of owners. 

How a Car Loan Affects Credit Score - Auto loans raise or lower scores? How fast? How many points?

What is Dave Ramsey's rule on cars?

Dave Ramsey's core car rules emphasize paying cash, buying reliable used cars, avoiding new cars unless wealthy, and keeping total vehicle value under half your annual income to stay out of debt and build wealth. His philosophy centers on avoiding car payments, which he sees as money lost on depreciating assets, encouraging saving for a solid, affordable used vehicle instead. 

Does having two cars affect insurance?

Insurance companies calculate your premium based on the total number of cars insured, the types of vehicles, your driving history, and how you use each vehicle. Each additional car adds to the total premium, but the exact amount depends on several important details.

What credit score is needed for a $40,000 auto loan?

Anything above a 660 (prime) is usually good enough for reasonable interest rates. According to an Experian report, 70% of borrowers fell into this range. The report also found that the average score for financing a new car was 754, and for a used car, 691.

What is the biggest killer of credit scores?

Your payment history accounts for 35% of your credit score, making it the most important factor. The later the payment, and the more recent it is in your credit history, the bigger the negative impact to your score. Plus, the higher your score is to start, the worse of a hit it will take.

Is it smart to have two car loans?

So the prospect of giving out not one but two loans to the same person comes with even more potential drawbacks. Having two auto loans means you have two financial obligations to pay back, increasing your monthly financial burden and chances of missing payments.

How much is $35,000 car payment for 72 months?

If you take out a $35,000 new auto loan for a 72-month term at 4.0% interest, then your monthly payment will be $547.58. Although your monthly payments won't change during the term of your loan, the amount applied to principal versus interest will vary based on the amortization schedule.

What is the 6000 car rule?

The Section 179 tax deduction gives vehicles under 6,000 pounds that are used for business purposes a deduction cap of $12,400 and $30,500 for vehicles over 6,000 but under 14,000 pounds.

How much car can I afford if I make $4,000 a month?

Some believe that, all combined, automotive expenses, including gas, insurance, car payments and maintenance, should not exceed 20% of your pretax monthly income. Other experts say that a vehicle that costs less than half of your annual take-home pay may be affordable.

How much is a $20,000 car loan for 5 years?

A $20,000 loan at 5% for 60 months (5 years) will cost you a total of $22,645.48, whereas the same loan at 3% will cost you $21,562.43.

What's the smartest way to pay for a car?

The best way to pay for a car balances affordability and cost, often meaning a mix of significant cash (down payment) and a small, short-term loan (e.g., 3-5 years) to build credit without excessive interest. Paying all cash avoids interest but can be a huge upfront cost, while paying all cash at a dealer might cost more than if you financed. Leasing offers lower monthly payments but you don't own the car. 

What credit score do you need to get a $30,000 loan?

To get a $30,000 loan, you generally need a good credit score (670+) for the best rates, but some lenders offer options for fair (580-669) or even lower scores, though with higher interest rates. Approval also depends heavily on your income, debt-to-income ratio, loan purpose, and the specific lender's criteria, with some lenders requiring scores as low as 560 or having no minimum. 

How rare is a 900 credit score?

The current scoring models in the U.S. have a maximum of 850. And having a credit score of 850 is rare. According to the credit reporting agency Experian, only about 1.3% of Americans have a perfect credit score, as of 2021.

What is the 2 2 2 credit rule?

The 2-2-2 credit rule is a guideline for lenders, especially for mortgages, suggesting borrowers should have at least two active credit accounts, open for at least two years, with at least two years of on-time payments, sometimes also requiring a minimum credit limit (like $2,000) for each. It shows lenders you can consistently manage multiple debts, building confidence in your financial responsibility beyond just a high credit score, and helps you qualify for larger loans. 

What brings your credit score up the most?

Ways to improve your credit score

• Paying your loans on time.
• Not getting too close to your credit limit.
• Having a long credit history.
• Making sure your credit report doesn't have errors.

What disqualifies you from an auto loan?

Large amount of debt

A DTI of 50 percent or higher may lead to rejection because lenders determine how much you can afford based on your income, current debts and requested loan amount. Paying down your debts is the best way to lower your DTI, but if you're able, a second source of income can also lower your DTI.

How much would a $70,000 car payment be?

A $70,000 car payment varies significantly but expect roughly $900 to $1,300+ monthly for a loan, depending on term (60-72 months common) and interest rate (e.g., 6-9% APR), or $700-$1,200+ for a lease, factoring in down payments, miles, and money factor, with total auto costs (payment, gas, insurance) potentially reaching $1,000-$1,500+ monthly for a comfortable budget. 

How can I raise my credit score 100 points in 30 days?

For most people, increasing a credit score by 100 points in a month isn't going to happen. But if you pay your bills on time, eliminate your consumer debt, don't run large balances on your cards and maintain a mix of both consumer and secured borrowing, an increase in your credit could happen within months.

What cars make your insurance go up?

Luxury cars and cars with higher trim levels often have higher rates as well because they're more expensive to repair than moderately priced cars and cars with lower trim levels.

Can I drive my boyfriend's car if I'm not on his insurance?

In most situations, auto insurance policies cover a licensed driver that you occasionally let use your car, even if that person isn't listed on your insurance. This is known as "permissive use."

Which type of car is cheapest to insure?

Cheapest Car Types to Insure

According to Insurify, trucks have lower premiums than sedans and SUVs, and sedans have the highest premiums. Although all vehicle types are represented in the list of cheapest cars to insure, Insurify says the average truck costs about 16 percent less to insure than the average sedan.