Bad credit from the start.. Add more lines?

[Zazoofuzz]

Hey there,

I'm 22 and just starting to consider buying a new car. I have a good job and an extremely low DTI ratio. In preparation for car shopping, I pulled my credit reports. My fico score is at 567 according to transition. This kind of blew my mind so I checked my report and saw I had a 30 day and a 60 day on my credit card from two or three years ago when I was briefly unemployed. I figured this must have been the culprit. I also realized that I only have two lines of credit though. A $2000 student loan currently in repayment, and my $3000 credit card which I've had for 3 or 4 years. This card has been maxed once, and I recently started paying more than my minimum

My question is this:
How can I start to build my credit to the point where I won't get destroyed by APR if I want a new car? Do I need another credit card? Do I just need to pay all my debt down? What steps should I take?

Also why is my credit so low?

[buildafico]

hi there! welcome to the forums!

what is your cc balance at right now? utilization is worth 30% of your score

what time frame are you looking to buy car in? a new card would be benneficial in the long run but right now would most likely cause a temporary score drop.

do you belong to a credit union? they are easier to work with on auto loans

do you know your other fico scores? we can direct you to a lender who might pull a more favorable report.

[Zazoofuzz]

I'm $30 away from my limit on the card. Soooo pretty bad on that front. My 22 year old jeep is costing me a few thousand dollars this month, and it gets 9MPG so the sooner the better. I don't feel safe driving it any more. I don't belong to a credit union. I'm not sure I even know how they work. Would I have to move my checking accounts to them? I only pulled transunions FICO. I also have the score discover gives me on my statement which is much better (relatively speaking) at 598. Not sure which bureau they use.

[buildafico]

well the high UTL is going to be your biggest issue right now. You don't HAVE to move everything to them but they tend to work with people more who are invested in them because they cross-collateralize everything you have with them. if you can pay off just like 500 dollars im confident that your score will go up enough to be in their range. the apr isnt going to be 5% itll be more like 10-12% but its better than a 25% financing company. you can call the CU and ask which beaureau they pull for auto loans they will most likely tell you.

[user5387]

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@Zazoofuzz wrote:
Hey there,

I'm 22 and just starting to consider buying a new car. I have a good job and an extremely low DTI ratio. In preparation for car shopping, I pulled my credit reports. My fico score is at 567 according to transition. This kind of blew my mind so I checked my report and saw I had a 30 day and a 60 day on my credit card from two or three years ago when I was briefly unemployed. I figured this must have been the culprit. I also realized that I only have two lines of credit though. A $2000 student loan currently in repayment, and my $3000 credit card which I've had for 3 or 4 years. This card has been maxed once, and I recently started paying more than my minimum

My question is this:
How can I start to build my credit to the point where I won't get destroyed by APR if I want a new car? Do I need another credit card? Do I just need to pay all my debt down? What steps should I take?

Also why is my credit so low?

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Payment history and utilization are around 2/3 of your score, so the 30/60 lates and high utilization are dominant factors.