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Registered: ‎05-22-2015
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Federal Loans pay my tuition but may be why I cant get approved for a CC

Hello all,

I've just found this website after hours of searching the web for advice. I'm going into my junior year of college and struggling financially. I have no family assistance.. Federal loans and state grants are the only things that keep paying my undergraduate tuition. I've worked part time my whole way through college, (For some reason my credit report says I have no income? I dont know why) I'm trying to build my credit score. I need to take out a personal loan so I can get a vehicle before I go to grad school. So, I wanted to build credit with a CC. Stupid 17 y/o me applied for a discover card with no job and was denied.. duh. About a month ago I decided to apply for a STUDENT CC through Capital One and was denied. So now I have three marks on my credit report. (IDK what the third one came from.) And I'm afraid to apply for another student CC for fear of denial and being marked again. I have a score of about 640 because of my federal stdent loans. I believe that since my loans are still open and deferred (I cant afford to make payments yet) CC Companies won't approve me. I'm crying trying to figure all of this out by myself and I just feel stuck and dont know what to do. Please help. 

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Posts: 196
Registered: ‎05-17-2015
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Re: Federal Loans pay my tuition but may be why I cant get approved for a CC

Student loans being defered doesn't have a HUGE negative on you but they are still there.  With a score that low you honestly should attempt to mabye get a store card where you often shop such as walmart for groceries or something similar.  Beyond that the only card you would probably be eligible for is a secured card that may or may not unsecure with time.

Starting Score: EQ634/TU664/EX644 5/18/15
Current Score: EQ681/TU723/EX702 8/24/15
Goal Score: All 700 by 1/1/2016


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Posts: 1,261
Registered: ‎10-21-2013
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Re: Federal Loans pay my tuition but may be why I cant get approved for a CC


wesleym wrote:

Student loans being defered doesn't have a HUGE negative on you but they are still there.  With a score that low you honestly should attempt to mabye get a store card where you often shop such as walmart for groceries or something similar.  Beyond that the only card you would probably be eligible for is a secured card that may or may not unsecure with time.


Everything in my siggy is with my evergrowing student loans. It's definitely possible to get CC's. I'd start with a small BoA secured card - it'll graduate. 

Current cards: MSUFCU Platinum, Amex PRG, Amex Surpass, Amex BCE, Citi Prestige, Citi Double Cash, Citi Premier, US Bank Cash +, Huntington Voice, AAviator, Sallie Mae, Discover IT, Chase Freedom TU:753 EQ Enhanced: 758
Valued Contributor
Posts: 1,653
Registered: ‎06-09-2008
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Re: Federal Loans pay my tuition but may be why I cant get approved for a CC

Have you reviewed your entire credit report?  If you go to https://www.annualcreditreport.com/ you can get a free copy of your report from each of the three CRAs.  It is possible your score is that low simply because you have a thin file with very limited history, but it's also possible that you have inaccurate or fraudulent information on your report making it difficult for you to get a CC.  You mentioned that you've seen at least one item on your report that you don't understand - you should figure out why that item is there and get it (along with any other issues) corrected before you apply again.

 

Once you've ensured that your report is accurate, you can try for some basic, entry-level credit cards.  Your bank or credit union probably offer basic cards, as well as a secured card.  They can help you identify which of their cards you might qualify for, and then you can use that card to build your score and work your way up to better cards.  On the whole, your student loans won't have a negative impact on your score while they are defered.  If you have a large amount of loans relative to your income, even though they are not in repayment, lenders may be wary of giving you access to more credit until your debt-to-income ratio improves.  A secured card is great for getting around that, because your deposit substantially reduces the risk for the lender.

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