01-16-2013 06:29 AM
Hello! I actually have a couple questions because I have a couple different factors at play. I will try to explain as best as I can!
In about a month, I am looking to lease a new car. I am also wanting to apply for the Chase Explorer MileagePlus credit card to start building airline miles for a trip I'm hoping to take next year. Currently my credit report shows my score as 690 with a 75% UT. I actually made a big payment on my credit card and my UT is now 35% which I hope will be reflected in my credit report soon, along with a higher score.
Question #1) I have just been offered a new job that I will probably start some time next month. Should I apply for these items before I start my new job or after? I didn't know if it would hurt me to apply for credit after starting a new job. I have a long history with the job I'm currently at and thought that might reflect better. Thoughts?
Question #2) Would applying for a credit card hurt my credit score, therefore hurting my chances of getting the lease rate I want on a car (or vice versa)? I've talked to the dealership I am wanting to lease a car from, they told me a minimum score of 680 is required for the lease rate I want. I'm obviously just over that so I don't want to do anything that will dip my score below a 680.
I realize my credit isn't the best, I may not even qualify for the credit card I want and don't want a credit app rejection to hurt my score either. Any advice would be greatly appreciated!! Thank you!
01-16-2013 12:51 PM - edited 01-16-2013 12:54 PM
Welcome to the forums!
Usually time in job is pretty irrelevant for both auto loans and credit cards as long as you can document the income. If you're looking at leasing a car after you get two paystubs generated, I'd go that route especially if it's at a non-trivially higher income. If that's too far out, then pull the trigger earlier.
Personally I would absolutely get the car sorted, and then look at the credit card. Interest rate on a car is a non-trivial financial expense, and no matter how good the rewards are on a credit card, almost always it's going to have less of a financial impact on one's life. Also any additional inquiry is going to be a negative of some amount, may be zero, but it will never be positive in the FICO model.
I would certainly expect an increase in your score from paying down the utilization that much; if you have excess cash reserve in addition to your downpayment (if required, may not be for a lease in your credit strata), might be worthwhile to try to kick it down to <30% which is possibly another bump but admittedly by how much is very much YMMV
Also so you're not surprised, major dealers will almost certainly pull what's called an auto-enhanced score; this is weighed differently than the other FICO scores you can find, so if you have a prior auto loan reporting in good standing, you may well be above where you think you are now, and likewise if you have negative information (sort of unlikely with your score in my estimation) it may hurt you... likewise not having an auto loan and being a "first-time buyer" also has a possible penalty associated with it. Don't be surprised if what they pull for your score isn't what you expect.
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