08-25-2012 07:59 PM - edited 08-25-2012 08:04 PM
Hey guys, I'm very new to credit. I've only had one credit card that I officially opened on May 1st, of this year. I'm 20, and I'm currently working my way through an apprenticeship making a pretty decent income (with no real-world responsibilities yet ) and my income will be (god bless) doubling in the next 2 years. My goal is to purchase a newer car between 14 and 20 thousand dollars by my 21st birthday (seemed like as good of a milestone as any) so I have almost one full year, to put myself in the best position possible to make this happen.
So here's my break down.
1) I've lived at the same address now for 20 years, no rent, only bills are a $90 cell phone bill, and an insurance policy, I pay off the whole premium at once to shave off a few bucks. About 600 dollars every months.
2) I've worked the same job now for 1 year and 1 month, and by my birthday next year it will be 2 years even.
3) I don't have a REAL FICO score yet, because I have only 1 trade line, that is only 3 months old (It takes 6 months for your first trade line to report, and ultimately generating you your first credit score, correct?
4) I am a member of a major bank, in which I hold 3 accounts, 1 for my direct deposit, my emergency fund where I always keep $500 dollars, and a savings account I have $2000 dollars in as of today, as well as a Local credit union I keep my primary savings in, I also have another $1100 dollars in there, and this is the savings I really want to focus and build on for my future.
5) I have one credit card, my Capital One Secured Card, I opened in May (3 months old) with only a $400 dollar balance, and my utilization has RELIGIOUSLY been less than 20% on this card, (I've read that between 5-20% utilization is ideal)
6) Also, I'm sure it means less than nothing since I don't even HAVE a real fico score yet, but my FAKOs i've seen so far are, 704 from Experian, and 684 from CreditKarma
So my questions are, what can I do in one years time, (besides just savings up the 15-20k and paying for the car in cash) to put myself in the best position possible to get approved for an auto loan, that I can use to really jump start my credit, with my extremely short, and limited history? Should I wait until my current card matures and I generate a FICO and apply for a major unsecured card? Would taking out a secured installment loan for a year and paying on it be a better idea? Or should I increase my current secured card's limit, through deposits until I have a larger limit, and show that I can handle that? What would YOU do if you were in my position with basically a completely clean sleight (a 12 dollar credit card balance as of today, cycle doesn't end until the 16th) no debt, no baddies, only a bunch of hard inquiries from my uninformed applying, to put yourselves in position to secure an auto loan in one years time?
Sorry for the rambling guys! Any and ALL input is highly appreciated.
08-27-2012 02:01 PM
You will get approved but your interest rate will get marked up since you are a first time buyer. The only way around this is to have one of your parents co-sign.
Since you have some time I would recommend you establish a relationship with a credit union. PenFed is an excellent one!
08-27-2012 03:03 PM
Try Nissan Financial they help people with no credit get into new leases. Try waiting until you have an offical fico score and then go and apply you have a better chance then people with bad credit Good Luck
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.