Need help, score increase 60 points...

[Anonymous]

Hi all,

I'm still rebuilding and new to the process of things. Long story short, I have a thin file. Oldest account is only 7 months. Discover card, Credit One and Fingerhut revolving. 

My EX score generated a score on May 1st of 601. Today, its 661 ( 1 collection that I disputed came off that didn't belong to me) 

On May 10th, Seattle Metro CU approved me to refinance both vehicles, approved for 2k CC and $500 LOC. They only use EX which I'm fortunate with because its the highest and cleanest file. TU is 612 (2 med collection and 1 state tax lien) and EQ 580(4 med collections and 1 state tax lien).

After refinance;

Auto 1 - $7k from 29%apr to 12.25%apr with SMCU (this loan was only reporting with TU and EQ)

Auto 2 - $23k from 23%apr to 11.25%apr with SMCU (purchased the car april 29,2017 and didn't report yet before I refinanced)

None of the accounts from SMCU are reporting yet but I've already signed all the agreements with them.

My question are, 

should I contact the loan officer and ask him to pull my report to show the score increase? 

Would they review to decrease the APR?

Would they increase the credit card limit and line of credit limit?

I'm not worried about the CC and LOC limits but definitely would like to decrease the APR for autos. I'd like to stay with SMCU as they have been very helpful and they are my neighborhood CU. 

Please let me know your thoughts and if I'm not making sense let me know so can clarify. Thanks for the help everyone!

[Anonymous]

One more question, this is probably all too soon.

Should I just trade in both vehicles and get one new vehicle and hopefully qualify for a new vehicle apr?

Thanks again guys and gals!

[Anonymous]

No way should you trade in these cars to get a new car APR.  The depreciation hit you will take combined with the transaction costs will offset any advantage you would get in APR and your scores are not good enough to get you great APR anyway.  Buying a new car is really expensive, even cars that hold their value extremely well lose at least 10k in value in that first year, take a look at edmunds.com true cost of ownership and it will show you depreciation costs.  I wouldn't focus on trying to get a better limit on your CC right now, I would call them and tell them your credit just improved and see if they will help you on the loan, if they don't you have still done really well.  Continue to work your rebuild and when your scores are up another 40-50 points refinance again at a lower rate.  I did this a couple of years ago started at 12.5% then refinanced to 8.5% and finally to 4.29%.  

Transaction costs and depreciation will ensure you are upside down on a car loan unless you put a decent amount down.  Trading in a car you just bought never a good ideas because of those factors.  My advice is to never buy a car you cannot live with for 4 years.  The other advice is always refinance that car when your credit has improved and you can cut that rate as long as your not adding to the length of the loan.  

Hope this helps, contrats on the reffnacing and progress on your scores, be paitent and work the building of your credit slow and steady and you will be in great shape.

[Anonymous]

Hi all just an update

Workingfor850. thanks for the advice. It all worked out with refinancing the vehicles from 11.9% and 12.25% down to 8.75% and 9%.Along the way SMCU reduced the rate of the CC from 14% to 11% with a CLI from $2k to $3k and LOC rate from 11.5% to 10%. All in all it decreased my monthly payments. Again thank you for the advice.

Now, that everything has settled. My score. dropped from 683 to 603. Did the drop come from closing the first auto loans then new open accounts because of the refi? 

As of today, I finally have a clean credit report on all 3 CRA!

Revolving

Discover $150/$500

Credit One Bank $0/$300

SMCU CC $500/$3,000

WSECU CC $0/$1,500

Fingerhut - $0/$500

Installments

F150 SMCU Loan 1 - $23k @ 8.75%

Explorer SMCU Loan 2 - $7k @ 9%

Closed Installments after Refinance

F150 SMCU Loan 1 $22k @11.9%

Explorer SMCU Loan 2 $6,700 @ 12.25%

F150 Westlake Financial Loan 1 $22k @22.5%

Explorer Credit Concept $6,700 @ 29.99%

Inquires are sky high! 60+ on all

No Collections/Public records and no late payments on any accounts for 9 months since I began my rebuild. 

[Appleman]

Your score dropped for many reasons.

60 plus inquiries - additional inquiries likely did not drop the score.

New accounts with very short history - this dropped your score. You reduced the AAoA from 7 months to just a few months. The drop in score is worth it with the savings in APR you recieved.

If you are in the rebuilding phase your score can be impacted more by new accounts. 

At this point, it will just take time and a perfect payment history. My guess is that at 6 months of aging on all the new accounts you will see a score bump along with another bump at 1 year. You have plenty of credit, keep those balances low and payments on-time.

Also as you pay down the F150 and Explorer the percentage you owe will drop also contributing to a better score.

Good luck and congrats on the better rates.