Reply
Member
olivia3636
Posts: 6
Registered: ‎09-05-2012

If I increase my credit limit unsecured card to $2k, will it help with car loan?

I am in the process of rebuilding my credit  and I have 2 cc's, one secured Orchard Bank card with a $300 limit and other non-secured Capitol One card with a $500 limit.  I use both cards regularly (with less than 20% utilization) and pay both off in full each month. As of this month, I officially have no debt to my name (as I just paid off the last collection after reading "Paid Collection" would help my score if even if the debt was old). 

 

So now I am looking to see what would be the best course of action if I want to buy a car in the next 3-6 months.  I have read that since I have low credit limits, even though I pay them off each month, I still won't look very good to lenders, because it will look like I don't have to manage much risk. 

 

So my question is, for purposes of getting an auto loan, would raising my credit limit to $2k on the secure card help me? And if it will, how long after raising  the limit should I expect to see the change, I don't want to apply for the loan prematurely.

 

Any help is greatly appreciated!


Starting Score: 650 TU FICO (8/29/12), 642 EQ-FICO (8/29/12) 606 EX (8/29/12)
Current Score: 709 TU FICO (9/22/12), 679 EQ-FICO (9/22/12), 695 EX (9/22/12)
Goal Score: 750 across all scores


Take the FICO Fitness Challenge

Regular Contributor
apandabear
Posts: 200
Registered: ‎03-15-2012

Re: If I increase my credit limit unsecured card to $2k, will it help with car loan?

I don't know about your CC limits affecting a car loan.. Generally low CC limits affect future CC limits. But I would (personally) much rather have that kind of cash around for downpayments.

 

I'm looking for a $20-23k car in the next 3 months, and my goal is $8k cash for use as a downpayment (almost there too!).. Even though I have 2 secured cards I'd like to boost (currently $1k and $1.5k).

 

I feel like having that cash around for the car, will 1) help me get approved, and 2) help lower the impact of a high-interest rate loan I might get stuck with, by financing less to begin with.

 

Raising your credit limits won't affect your score. It could take an entire billing cycle for the updated balance to show on your CR though.

 

 

BTW - Having a collection marked as "paid collection" doesn't help your score. It's scored the same as an unpaid collection. You want that off your credit report for any FICO effect. Granted, it does look better in a MANUAL review, by a human. But to the computer that generates your score, it makes no difference.

 

*Bump* for more answers!


2009-10 - C/Os
2011 - Debts paid, no open credit
2012 - Rebuilding started, secured cards opened, SL rehabbed - EQ myFICO 636
2014 - 10k Discover, 3.5k Freedom, AmEx Green, SL, Auto Loan - EQ myFICO 672

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+