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Valued Member
Posts: 57
Registered: ‎02-12-2009

Auto Loans and Credit Card Apps

I am in the process of purchasing an automobile.  I have been preapproved through my local credit union for $30,000 at 3.5% APR.  I'd like to use this in order to secure better financing through the dealership if it is available.


I am also in the process of closing down subprime CC accounts with annual fees as I have gathered a nice number of prime accounts and built my credit scores into the 700+ ranges.  I recently applied for a CC account and was approved and I need to apply for 1-2 more in order to meet the CL total of my subprime cards so my utilization rates are not affected.


Will applying for these cards greatly affect my ability to secure better financing through dealerships?  I'd like to ditch the subprime cards ASAP as some of the annual fees associated with the accounts are monthly.  It's like throwing money in the garbage. Smiley Frustrated

Valued Contributor
Posts: 1,115
Registered: ‎10-31-2011

Re: Auto Loans and Credit Card Apps

Just note that applying and adding new accounts will more than likely have a negative affect on your FICO since you will be geting INQs and lowering your AAoA, however auto dealers often use a "Auto- Enhanced FICO" so YMMV.

Established Contributor
Posts: 760
Registered: ‎02-11-2012

Re: Auto Loans and Credit Card Apps

+1, too many inquiries and applications are going to bring your AAOA down. Plus the added risk of two or more credit cards and you may be sending smoke signals to lenders. "Too many new credit accounts rapidly", warning, warning. You may want to wait six or more months after opening your new cc's before another major hit. Just a thought, Your local Credit Union is your friend, does favors, and treats you personally. You may want to get the car loan through them even though they can not price match. Overall it is probably only $10.00/ month difference on your payment. I just purchased a car for my wife, (now two new car loans this year) and used OUR Credit Union for financing. They have given me some nice favors in the last year (been with them 12 months now). Just requested a cli last week, HP on Their Visa Credit Card and was raised from $10k to $19k.   To me SERVICE, Favors, and  a HUMAN to personally see are PRICELESS! As always it is your choice and YMMV. Good luck.

Starting scores 01/02/2012 EQ 707(Fico) TU 733(Fico) EXP 735 (FAKO)
Updated scores 06/01/2014 EQ 797(Fico) TU 768(Fico) EXP 769 (Fico), EQ 849 (Next Gen 5/27/14 Penfed)

Remember the Three P's: Pay early in Full, Pay on Time, Patience

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