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Should I Limit # of CC's to Prepare for Car Loan?

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Anonymous
Not applicable

Should I Limit # of CC's to Prepare for Car Loan?

Should I Limit # of Credit Cards if I'm Eventually Going to Apply for a Car Loan?

 

hrough help of this forum, I've been able to repair my credit and get a few 0% interest credit cards to ease up some long-term debt.  I'm tempted to keep going and try for addtional credit that comes with sign-up bonuses, etc.  But I expect I'm going to need a car loan within the next 1 to 2 years.  Just wondering if having too much credit a bad thing in that case?

 

Message 1 of 9
8 REPLIES 8
Anonymous
Not applicable

Re: Should I Limit # of CC's to Prepare for Car Loan?

I don't think the number of, or limits of revolving accts as too much of an effect on installment loans such as auto. What may, is any kind of credit seeking behavior (too many apps in a short amount of time), this might spook a lender.

If you give yourself 12mo the effect of inquiries will no longer impact scores and waiting 24mo you will have a nice clean report. I personally would wait at least the 12mo and keep apps to a minimum for 24mo for any kind of major installment loan.
Message 2 of 9
kdm31091
Super Contributor

Re: Should I Limit # of CC's to Prepare for Car Loan?


@Anonymous wrote:

Should I Limit # of Credit Cards if I'm Eventually Going to Apply for a Car Loan?

 

hrough help of this forum, I've been able to repair my credit and get a few 0% interest credit cards to ease up some long-term debt.  I'm tempted to keep going and try for addtional credit that comes with sign-up bonuses, etc.  But I expect I'm going to need a car loan within the next 1 to 2 years.  Just wondering if having too much credit a bad thing in that case?

 


The best thing you can do is to prioritize the larger goal which is the car loan. A sign up bonus isn't worth it if it means your car loan's rate will be higher. You will end up paying for that sign up bonus many times over.

 

Keep your reports free of inquiries and new accounts for at least 12 months before the loan. 24 would be ideal, but 12 is definitely a start.

Message 3 of 9
Gmood1
Super Contributor

Re: Should I Limit # of CC's to Prepare for Car Loan?

Your CC apps from my own personal experience has ZERO affect on auto loans.
Your scores and payment history are what matters most. As long as your scores are 670 or better. You'll most likely qualify for the best rates. Just do your research on where to seek financing beforehand. Knowing what lenders to apply with for the best rates is what matters most.
Message 4 of 9
SouthJamaica
Mega Contributor

Re: Should I Limit # of CC's to Prepare for Car Loan?


@Anonymous wrote:

Should I Limit # of Credit Cards if I'm Eventually Going to Apply for a Car Loan?

 

hrough help of this forum, I've been able to repair my credit and get a few 0% interest credit cards to ease up some long-term debt.  I'm tempted to keep going and try for addtional credit that comes with sign-up bonuses, etc.  But I expect I'm going to need a car loan within the next 1 to 2 years.  Just wondering if having too much credit a bad thing in that case?

 


You're better off putting in no new applications until after the car loan. Not so much because of credit limits but because of inquiries and average age of accounts.

 

 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 5 of 9
righthererightnow
Frequent Contributor

Re: Should I Limit # of CC's to Prepare for Car Loan?

wish I had read this six months ago..... I thought six months was enough time to space it out. eeeek.

 




Message 6 of 9
kdm31091
Super Contributor

Re: Should I Limit # of CC's to Prepare for Car Loan?


@righthererightnow wrote:

wish I had read this six months ago..... I thought six months was enough time to space it out. eeeek.

 


6 months is better than 0 months. There's no set in stone guideline, only that limiting apps before a loan is never a bad idea.

Message 7 of 9
Anonymous
Not applicable

Re: Should I Limit # of CC's to Prepare for Car Loan?


@Anonymous wrote:

Should I Limit # of Credit Cards if I'm Eventually Going to Apply for a Car Loan?

 

hrough help of this forum, I've been able to repair my credit and get a few 0% interest credit cards to ease up some long-term debt.  I'm tempted to keep going and try for addtional credit that comes with sign-up bonuses, etc.  But I expect I'm going to need a car loan within the next 1 to 2 years.  Just wondering if having too much credit a bad thing in that case?

 


I understand WHY you ask the question overall but in all HONESTY it's a 'rabbit-hole' issue....truth be told....it's really un-answerable....opinions can fly here and there... all based upon our implied bias based upon filling in the inevitable holes in such an open-ended proposition

 

For Pete sake (I'm ribbing) you're talking about what 'might' "eventuall" happen up to 2 years from now with regard to a CAR loan...

 

I'm fooling with you obviously....but in fairness to give you any actually useful vs just anecdotal 'feelings' is almost impossible other than the standard

keep paying your bills keep your debt low yada, yada and you'll be ok....b/c in general that's true

 

A car purchase isn't that big a deal, to prep for like maybe a mortgage.....the only reliable thing that can be said is to protect your score to qualify for the best rate possible for your situation, which again could be vastly different in 2 years based upon how and what you do or don't with the stuff you have now.

 

Intelligent, useful info like if you're a 1st time auto buyer, what your past auto payments may be like, do you have car note experience at certain price points for a lender to vet can all lend more meat to what you may expect and shot for vs the vagueness of will having a few more CC affect you getting a car loan

 

How will your income vs overall debt look in relation to the size of loan, will there be a down payment, are we talking an 18k basic car, a 60k mid luxury....so many 'rabbit-hole' issues that the answers become moot w/o context....

 

Again, I 'get' why you ask....but answering intelligently is nearly impossible ....the way the question was asked and the detail given within it would concern me if I were close enough to you to ask about your finances b/c it 'feels' dangerous based upon my experience.

 

When a person is talking about juggling the pay back of LT debt, 0% CCs and the ZEST for apping for MORE CCs is brings about a bad feeling, no offense, certain storms can be seen forming 5 miles away if you know what you're looking for IMO , in general, when certain questions are queried the hair on the back of my neck stands up b/c they are tell tale signs of financial danger....

 

Like a guy leaving AA asking about 'how the beer' is made sniffing around the bar...this ain't looking good ( not the car loan question) the:

" I'm tempted to keep going and try for addtional credit that comes with sign-up bonuses, etc."

should SCARE the ish out of any reasonable person looking at you as a 'profile'....not a person, friend....we don't know YOU ....but as a profile...

it's equivalent to your buddy who just got married and moved to your town asking where the hookers generally walk and what the prices are like....it's just a red flag.

 

Take that as concern, as a recoverer is 'chasing' credit apps for ADDITIONAL CREDIT and freaking sign up bonuses something that should really be om the forefront for you and your profile at this point or has clever marketing a social peer pressure pulled you into a position that can't be of real value to you vs the potential dangers of playing with that kind of fire (remember how that LT debt came about)......it pains me that so many ppl tryingto pay down past debt are snooked into more B.S. behind freaking 'bonuses' and other such nonsense....

 

The same way I'd beg a recovering alcoholic to NOT drink...I plead with you to handle the current LT debt you speak of rather than romanticizing and being TEMPTED (your word) in to keep GOING (again your words) into more debt hell (hat one's mine)....ask yourself other than vanity and hype WHAT is this 'additional credit' for?

 

And does it trump, putting your effort and focus on retiringthe debt you have now vs making it easier to get deeper in.....none of my business but again when it feels like a storm I gotta sound an alarm alert...

Sincerely, Best of Luck

Message 8 of 9
greent
Frequent Contributor

Re: Should I Limit # of CC's to Prepare for Car Loan?

I would say don't app anymore and go to the garden. Wait 12 to 24 months before you apply for the car loan. If you wait 24 months from the date of your last app then your credit will be clear of inquiries.


Message 9 of 9
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