topic Re: Auto Refi or new CC? in Rebuilding Your Credit

Auto Refi or new CC?

Anonymous — Mon, 15 Apr 2019 19:53:58 GMT

I continue to be overwhelmed by the abundance of great info on this forum. Thanks to everyone for that. Quick summary of where I’ve been:

Somewhat messy divorce (at least financially). Trying to rebuild so that I can get a home for my kids.

October 2017 – Sheriff’s sale (house foreclosed)

May 2018 – Starting rebuild: Discover IT secured card ($1000). Graduated in December to unsecured, but no luck with CLI since then. FICO score on Discover = 575 at that time, 620 now.

June 2018 – Car Loan with GM Financial. $22.5k remaining @ 20% interest (yes, I know).

July 2018 – Cap One Platinum (unsecured) $300, graduated to $500 in January. (Just last week was approved PC to Quicksilver thanks to the link from this forum, but I don’t believe a CLI was with it.)

Sept 2018 – Car Loan with One Main. $5k remaining @ 20% interest (needed car for kids)

Since that time no activity, no inquires, just actively paying everything on-time and working on debts. Last month I found these forums and actively started working on my reports.

Negatives:

Student Loans with Cornerstone – Direct Loans. Tax return intercepted and they are now paid in full. However, late payments show up so they are negative. Not due to come off until 10/2022. Tried GW, but since the gov’t took them back, not much success. Unfortunately it reports as 3 separate loans.

Foreclosure with WF – because of DoFD, TU says will come off 2/2020 (will request EE when closer), but EQ says much later.

Auto Loan with WF – charged off in 2013, TU says will come off 5/2020 (will request EE when closer)

Late Utility Bill – was able to get removed this month due to comments from this board! Waiting to see impact to score.

13 Collections of amounts from $56-$1000. All with same collection agency from same medical group. Working through that process with PFD, etc.

Was able to get a non-medical collection removed this month with PFD, and another with EE.

Have multiple auto loans closed and always paid on-time, reporting as positive.

Discover this month FICO says 620, but that is with 60% util. I paid CapOne in full and Discover down to 8.9%. Waiting to see that jump this month (along with the deletes mentioned above). However CreditWise says 588 and has not moved at all over the past 6 months. Hoping the Disco is more accurate based on what I’ve read.

Wondering where to go from here. I’ve been pre-approved for a Kohl’s charge (but I’d really only use it at back-to-school and Christmas) and pre-approved for auto refinance through Clearlane. I’ve read that it helps to have 3 CC accounts, but I also need to refinance soon, and don’t want to risk too many HPs. Just read about DCU. Is it worth trying to get auto-refinance through them and then ask for a CC auth with the same HP? Is it worth waiting until next month when my disco and GM auto reaches 1 year? (hopefully better score and maybe even CLI). My goal is to set myself up for a mortgage next year (which would be 3 years after the foreclosure). I feel like I’ve made moderate progress over the past year, and that was before starting with the info on this forum (based on CapOne PC). Sorry for the novel, but thanks in advance for your time!!

Re: Auto Refi or new CC?

Remedios — Tue, 16 Apr 2019 15:04:58 GMT

When your youngest revolving account reaches a year, there should be some scoring gain. For you, that will be 07/19.

If you are looking into buying a home, stop applying for new credit. Work on negatives and let your accounts age.

Re: Auto Refi or new CC?

pgtackle2003 — Tue, 16 Apr 2019 20:36:49 GMT

I can certainly see wanting to refinance those auto loans at 20%. For reference DCU actually uses your EQ5 score for decisions. I would use the products here on MyFico to check what that score is, then you'd have a better idea if you could be approved. I wouldn't apply for anymore CC's right now as I haven't heard of any lenders who specifically like to see 3 CC accounts. I do believe with DCU they would use the same Hard pull to consider both auto refinance and CC application. The problem might be if you're upside down in your current auto loan because of the high interested. DCU does have max LTV they will do, so you might check on what those are before applying.

Re: Auto Refi or new CC?

Anonymous — Tue, 16 Apr 2019 21:32:24 GMT

Thank you both for the info. My comment around the 3 CC accounts was based on a lot of posts I've seen on here that seem to state that is the magic number, but I believe that is more for a score benefit than a particular lender requirement.

I was preapproved for an auto refi with Clearlane, but not sure what the rate is yet. I'll check into the value issue. Thanks for the tip on that! I haven't had any other inquiries for awhile. Just trying to clean things up. My hope with the refi was to use the savings to pay down more of the other debt.