Getting ready to pre-approve; Credit Utilization affect

[Anonymous]

As far as I know, it's just the % of the credit you are using that matters in this case.  The $ amount of it affects your debt to income ratio, but $287 is hardly going to mark you on that if you make 47k a year.  It's the fact that it is 51% of your limit that will hurt you.  It has a pretty large impact on your score, so I would wait for it to report paid.   My FICO scores (from myfico.com) on EQ and TU were each right around 590 with 89% UTI.  I paid it down to 31% and my EQ went to 618 and my TU is now 644.  My EX PLUS FAKO went from 667 to 690 (I have nothing negative on EX, other than age of accounts).  That score means nothing but I thought I'd mention it.  I actually paid my UTI down to 13%, but I also have an Orchard card and I'm still waiting another week or 2 before I see that on my reports. 

The length of your credit history will help you a lot, I think, as well as the student loans.  I don't know what your bad marks are, but you should have a downpayment for the best chance.  I would worry more about what kind of interest rate you may get.  From what I have read, the larger your downpayment, the smaller the APR and your chances of approval will be much better.   Also Ford has a first time buyers program, and I would assume others do to.  I would look into that.   If you know one of your reports looks much better than the other two, like in my case with EX, I would also look for a credit union that only pulls that report and apply with them.

Oh and congrats on your credit limit increase!  I asked for one and I got a standard "we are not doing customer initiated increases at this time." 

Good luck!

[Anonymous]

Yeah I sent them a message asking if they report to the CRA's when the statement cuts, and if not, when do they, and they emailed me back and said "We report every month" lol  No crap. 

[Anonymous]

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@Anonymous wrote:

Hello all,

New to this site and have been spending the past couple of weeks browsing through the tons of informative posts and knowledge provided here. After reading all about the factors that affect one's credit score, I have a couple of questions.

I am slowly building my credit. Got my first credit card back in June of last year and yes, it was from Orchard. But I got it purely for the purpose of builidng some sort of credit history. I have checked out my FAKO scores from CK and quizzle and they are 661 and 670 respectively. 

My reports show a 57% utilization. This is just $284 on a $500 limit card from February. Orchard told me they update on the last day of every month. Well, I paid off the $284 and they also gave me a $200 CLI. How much of an impact will this have on my score leaving a 2% utilization on this month's report? What kind of impact on pre-approval will it have if I were to apply now with this high utilization showing?

I have been holding out on pre-approving for an auto loan because I want my reports to show a 2% utilization instead of 57%. My question is, is anything taken into account regarding that it is only $284 on a $500 credit limit or is the percentage the only thing they look at?

I have this lingering fear that I might not get pre-approved. This would be my first auto loan and I'm looking to finance around $14k-$17k.  All my open accounts, only 6 total, 5 student loans and Orchard, have perfect payment history reported, with the oldest tradeline being 6.5 years. 2 bad marks. DTI is less than 10%. I make $47k a year. Any thoughts?

Thanks!

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Your utilization is not rally an issue. The fact you have a very small credit file is the killer. I would recommend at least 20%-30% of the transaction down and that should get you financed.

[Anonymous]

Please, Please, Please quit worrying about your score. It is not going to be the biggest driver in your car loan. You have a very thin credit profile which means for car loan purposes it is not going to weigh heavily on your deal.

You need to save up a 20%-30% downpayment. 

What kind of car are you looking for?

[Anonymous]

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@Anonymous wrote:

lol ok then. Easier said than done though, especially when sites like this exist. 

Talked to my loan officer at my CU and explained him my situation. He told me they pull TU and said in his experience TU tends to be higher than any of the other scores from the other CRA's he's seen.

Their rates:

640-684- 6.54%

685-743- 4.54%

744-850- 3.99%

for up to 60 months.

I'm looking for a Subaru WRX. 2006/2007. Looking to finance around $14,000 and put down like $2k.

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Again, credit scoring tiers are guidelines and assume that you have a fleshed out credit profile. There are many factors that can push or pull you into other tier brackets.

Although you will get financed, you may or may not fall into the scoring tiers when you do it.

http://ficoforums.myfico.com/t5/Auto-Loans/UPDATE-TU-673-What-do-you-think-I-can-get/td-p/866550 

[Clashmoore]

I had a >95% util rate ($5000 in credit debt) and my credit score was 602 for EQ when I started my monitoring here. This was late Feb 2011. I paid off the credit debt leaving $100 on my highest CL card and when the reports were updated it raised it to 645 in March. I purchased my TU score and it was 682.

I still had a collection on that report, a medical that is supposed to be workers comp. CA agreed to delete it if paid in full and sent me a receipt to send to my worker comp case.  I also have a 60 day late on my school loan from June 2010.

When I went for a new car loan later in March 2011, they pulled my EX score and it was 695, not sure what was listed or what was bringing it down.