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Advice for Approval & Low Rate for Thin File

Established Member

Advice for Approval & Low Rate for Thin File

What advice would you give to someone with a thin credit file to give them the best chances for approval with a reasonable rate (reasonable in this situation is < 6.5% APR)? A bit more details...

 

Oldest account is 10 months.
4 cards, 30% max utilization on all of them.
Card 1 $500 limit, Card 2 $1000, Card 3 $2100, Card 4 $1100
Last 6 months had 3 inquires...possibly 4.

 

No bank accounts (money market, savings, checking) at this time.

Message 1 of 5
4 REPLIES
Valued Contributor

Re: Advice for Approval & Low Rate for Thin File


shavit87 wrote:

What advice would you give to someone with a thin credit file to give them the best chances for approval with a reasonable rate (reasonable in this situation is < 6.5% APR)? A bit more details...

 

Oldest account is 10 months.
4 cards, 30% max utilization on all of them.
Card 1 $500 limit, Card 2 $1000, Card 3 $2100, Card 4 $1100
Last 6 months had 3 inquires...possibly 4.

 

No bank accounts (money market, savings, checking) at this time.


Impossible to give any guess or advice without actual credit scores.  In general my advice is always to join a credit union like Penfed, DCU, NFCU or a local credit union and use them for your auto loans and low cost banking solutions.  I suggest you pay the few bucks to get your actual scores (auto scores are what they focus on) and come up with some other goals and details.  What is your income, debt to income ratio and how much do you plan on spending, new car or used?  Also when are you planning on buying?

 

 

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores Aug 2017: EQ 675 TU 695 EXP 698
Message 2 of 5
Established Member

Re: Advice for Approval & Low Rate for Thin File


workingfor850 wrote:

shavit87 wrote:

What advice would you give to someone with a thin credit file to give them the best chances for approval with a reasonable rate (reasonable in this situation is < 6.5% APR)? A bit more details...

 

Oldest account is 10 months.
4 cards, 30% max utilization on all of them.
Card 1 $500 limit, Card 2 $1000, Card 3 $2100, Card 4 $1100
Last 6 months had 3 inquires...possibly 4.

 

No bank accounts (money market, savings, checking) at this time.


Impossible to give any guess or advice without actual credit scores.  In general my advice is always to join a credit union like Penfed, DCU, NFCU or a local credit union and use them for your auto loans and low cost banking solutions.  I suggest you pay the few bucks to get your actual scores (auto scores are what they focus on) and come up with some other goals and details.  What is your income, debt to income ratio and how much do you plan on spending, new car or used?  Also when are you planning on buying?

 

 


Income is $1600/month (but can be a few hundred more with monthly commissions)


Debt at this time is just credit cards and is reporting 28%


Rent will actually be changing due to my lease being up and I'm considering downsizing big time. Either way, I estimate housing cost w/utitlities to be no more than 40% of my income.


I'd love a pickup truck 2014 or older, if not, then I will glady do a sedan such as an Accord due to the reliability and mileage. I don't want to spend more than 16K out the door.


April Fico score (according to CRA Discover pulls) is 704.

 

I'll look into joining PenFed and I so appreciate your input. This is new to me and I am grateful for the forum's insight!

Message 3 of 5
Valued Contributor

Re: Advice for Approval & Low Rate for Thin File

Your income is going to be the biggest issue.  With 40% of your income going to housing expenses it will be tough to get a loan for much.  The thin file is not nearly as much of an issue as the income and housing expenses.  Penfed or DCU are still your best shot though.  Probably best to get a sense of what payment you can swing comfortably and then work back from there on the loan amount before you apply.  Alliant is also a good credit union, I recently joined them and the process was very easy.  Don't take my comment about your income as an insult or an attempt to discourage you I just want to point out that is a factor.  16K is probably doable but be prepared that they may push back and qualify you for less.  The higher the interest the less you will have to work with so that is why credit unions are essential.

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores Aug 2017: EQ 675 TU 695 EXP 698
Message 4 of 5
Established Member

Re: Advice for Approval & Low Rate for Thin File

I appreciate your comments :-) certainly no offense taken. I am grateful to get such insight to increasing my chances of getting what I need.

I'm going to explore more options in both housing and employment. The income shared is me working part time. I love the flexibility but maybe it's time to considering going full time (puts on half smile lol).
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