Expert: Joe Montgomery - 5/22/2007

Question
QUESTION: What does my credit score need to look like in order to get a personal loan for $5000? My score is currently at 568 and I do plan on paying the remaining balance off my credit cards and getting my sisters car out of my name before i try to get the loan. Or do I have to wait at all?

ANSWER: You will have an issue getting qualified for a personal loan with your credit score.  Most lenders want a 600 or better score.  I would talk to your bank or credit union and find out exactly what you can do to help improve your score, and what their lending requirements are before you worry about the car.

---------- FOLLOW-UP ----------

QUESTION: But, I have my car and her car in my name, the Credit Cards that I have only have a $500 limit and I have two of them. I'm worried that the bank will not really be honest with me on what I really need to do. Will my chances of getting a loan be higher if I tried to get an auto loan for $5000?

Answer
Yes.  Most car dealerships have lenders that they can use for people with credit scores down into the 400's.  They usually want some $ down, so be prepared for that as well.  Don't worry about going to a bank or credit union for this loan, as it will be more difficult, and they will most likely not be able to help you.  Car dealers really want to sell the car, and will be more persistent.  As for your sister's car in your name, explain that situation and hopefully they can help you there as well.
Good luck!