topic Re: Applying for a credit card after auto loan in Credit Cards

Applying for a credit card after auto loan

Anonymous — Sat, 16 Feb 2019 19:06:11 GMT

I acquired financing last week from a dealer to purchase a car and would like to get a credit card to continue to build my credit. I currently have a 698 FICO score with pretty limited history - I only have one open account which is a card I am an Authorized User on that I no longer use or pay for. It has a $9,000/10,000 balance that has been paid on time every month since 2012. I made the vehicle purchase last Wednesday and since they are waiting for a couple documents for my trade in, the loan has not shown up on my report and my score has not been affected yet.

Can I apply for a credit card (Discover Cash Back) now? Do I need to wait to make a few payments on my car loan before applying? I'd rather do it sooner than later, but if it'll be a significant difference I can push it back a little while.

Thanks

Re: Applying for a credit card after auto loan

gdale6 — Sat, 16 Feb 2019 19:38:21 GMT

Welcome to the board

Have no idea why the auto spam filter marked this as spam, its been restored for you.

Re: Applying for a credit card after auto loan

Anonymous — Sat, 16 Feb 2019 19:41:49 GMT

Thanks!

Re: Applying for a credit card after auto loan

Remedios — Sat, 16 Feb 2019 21:17:08 GMT

If you're going to apply, do it before auto loan shows on your CR. Loan will temporarily drop your score, so I would not wait.

If you do get approved, you may want to think if you really want to stay AU on a maxed card, unless you know it will get paid down soon.

Re: Applying for a credit card after auto loan

Kforce — Sat, 16 Feb 2019 21:33:30 GMT

@Remedios wrote:
If you're going to apply, do it before auto loan shows on your CR. Loan will temporarily drop your score, so I would not wait.
+ 1, I would apply now
If you do get approved, you may want to think if you really want to stay AU on a maxed card, unless you know it will get paid down soon.
+ 1, I would give up being an AU on a maxed out card, after getting one of my own.

If you do not get the Discover IT, go for a secured card that graduates.

Re: Applying for a credit card after auto loan

Anonymous — Sat, 16 Feb 2019 21:44:15 GMT

@Anonymous wrote:
I acquired financing last week from a dealer to purchase a car and would like to get a credit card to continue to build my credit. I currently have a 698 FICO score with pretty limited history - I only have one open account which is a card I am an Authorized User on that I no longer use or pay for. It has a $9,000/10,000 balance that has been paid on time every month since 2012. I made the vehicle purchase last Wednesday and since they are waiting for a couple documents for my trade in, the loan has not shown up on my report and my score has not been affected yet.

Can I apply for a credit card (Discover Cash Back) now? Do I need to wait to make a few payments on my car loan before applying? I'd rather do it sooner than later, but if it'll be a significant difference I can push it back a little while.

Thanks

Check the Discover, Amex, Capital One, Chase and CITI prequalify sites first and see what comes up. You may be surprised. 🙂

Re: Applying for a credit card after auto loan

Anonymous — Sat, 16 Feb 2019 22:18:32 GMT

I appreciate everyone's advice. If I sign up for a card today, should I wait 6 months and then remove the AU maxed out card? Will 6 months of car loan and credit card payments put me in a better position without having the 7 years of on time payments but a very high credit usage?

Re: Applying for a credit card after auto loan

Remedios — Sat, 16 Feb 2019 23:59:03 GMT

@Anonymous wrote:
I appreciate everyone's advice. If I sign up for a card today, should I wait 6 months and then remove the AU maxed out card? Will 6 months of car loan and credit card payments put me in a better position without having the 7 years of on time payments but a very high credit usage?

When your loan reports and if you get the card, remove yourself.

Such a high utilization is hurting you more than score gain from an older account. Maxed out card will be costing you a lot of points.

Did you check Discover pre-approval yet?

Re: Applying for a credit card after auto loan

Anonymous — Sun, 17 Feb 2019 00:24:47 GMT

Discover pre-qualified me for only their secured card, so I went with the capital one quicksilver one and was approved. What will happen to my score with no open accounts more than 6 months and only an auto loan and credit card that I have yet to make payments on?

Re: Applying for a credit card after auto loan

Remedios — Sun, 17 Feb 2019 00:31:52 GMT

@Anonymous wrote:
Discover pre-qualified me for only their secured card, so I went with the capital one quicksilver one and was approved. What will happen to my score with no open accounts more than 6 months and only an auto loan and credit card that I have yet to make payments on?

It's almost impossible to tell because you have several variables going on there

Car loan will drop it at first, you will regain those points in time as the loan gets paid down.

First account in your name should yield scoring gain but if you're still AU, you may see very little if any gain.

You'll lose some, gain some, but in the long run, make your payments on time, dont max out cards and score will go up.

If I had to guess, the reason discover only had secured card for you is the utilization on that card. It makes it appear as if person is in financial distress and lenders are not willing to extend additional credit.

Re: Applying for a credit card after auto loan

Anonymous — Sun, 17 Feb 2019 00:40:41 GMT

Congratulations on your QS1 approval. What is your SL?

I think having a 7yr old acct at 90% util will hurt you more than it will help. Having a young profile will affect your scores, but they will bounce back with age and responsible use of your acct(s). Someone please correct me if I’m wrong.

Re: Applying for a credit card after auto loan

Anonymous — Sun, 17 Feb 2019 01:16:38 GMT

$2,000 credit limit, which is around where I wanted to be. Sounds like the consensus is I'm better off getting rid of the high usage account so I'll do that once the auto loan hits in the next few days. Thanks everybody for the input!

Re: Applying for a credit card after auto loan

Remedios — Sun, 17 Feb 2019 01:23:57 GMT

@Anonymous wrote:
$2,000 credit limit, which is around where I wanted to be. Sounds like the consensus is I'm better off getting rid of the high usage account so I'll do that once the auto loan hits in the next few days. Thanks everybody for the input!

It will be good for you

Enjoy your new car and your new card. Make sure to come back when it's time for the next card lol

Re: Applying for a credit card after auto loan

Gollum — Mon, 18 Feb 2019 08:09:38 GMT

@Anonymous wrote:
I acquired financing last week from a dealer to purchase a car and would like to get a credit card to continue to build my credit. I currently have a 698 FICO score with pretty limited history - I only have one open account which is a card I am an Authorized User on that I no longer use or pay for. It has a $9,000/10,000 balance that has been paid on time every month since 2012. I made the vehicle purchase last Wednesday and since they are waiting for a couple documents for my trade in, the loan has not shown up on my report and my score has not been affected yet.

Can I apply for a credit card (Discover Cash Back) now? Do I need to wait to make a few payments on my car loan before applying? I'd rather do it sooner than later, but if it'll be a significant difference I can push it back a little while.

Thanks

I don't think you should be in a hurry to apply for credit cards. If you keep making your car loan payments on time, your car loan will improve your credit. There are several different ways that car dealers can make a profit from the sale of a car (the car dealer's goal is to make a profit each of those ways). It is common to be "upside down" (upside down means owing more than the car is worth) after buying a car via a car loan, but being upside down is not necessarily a cause for alarm. So my suggestion is to concentrate on making your car payments on time, every single time. If you make your car payments on time, your creditworthiness will improve.

Re: Applying for a credit card after auto loan

kiea — Mon, 18 Feb 2019 10:53:52 GMT

Yes, the previous post are right regarding the AU account. Think about it this way once your new card starts reporting you will have a $12,000 limit reporting but you will owe $9,000 which is already over 50% ulitization so you score might go down before it goes up.

Also, the Discover secure is a good option. They will unsecure it after 7 months and raise your limit if you make on time payments.

Re: Applying for a credit card after auto loan

AverageJoesCredit — Mon, 18 Feb 2019 11:49:36 GMT

2k is pretty generous of C1 on your first card. I think you should get the Disco secured as well as it can graduate in 7 months and by 5hen youll have 7 months more history. Having more thsn 1 cc and a loan can only help you. Good luck