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Preparing for credit

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Preparing for credit

So back in August 2016 I tried to get an auto loan to get rid of my 2002 Ford Taurus that was rusting out. 

At the time I was only 18 and had one credit card for 4 months didn't even generate a FICO score at that point. I had to go to a buy here pay here auto place to get approved for a car. 

 

Fast forward to Janurary 2017 FINALLY generated a FICO score so I was looking to back my credit and make it deeper so I got 3 more credit cards 

Cap1, Amazon, and Discover.

 

Now it's Almost May 2017 and i'm looking to get out of my bad loan so i heard good things about Cap1 auto credit so i went there to try and apply for just a New or used car loan and was instantly denied reasoning being "Limited Credit History."

 

What should i do to prepare for getting approved for a Auto loan looking at August 2017.

 

PS. I have no co-signer and down payment would be around 3k 

6 REPLIES 6
Valued Contributor

Re: Preparing for credit


@lzach83 wrote:

So back in August 2016 I tried to get an auto loan to get rid of my 2002 Ford Taurus that was rusting out. 

At the time I was only 18 and had one credit card for 4 months didn't even generate a FICO score at that point. I had to go to a buy here pay here auto place to get approved for a car. 

 

Fast forward to Janurary 2017 FINALLY generated a FICO score so I was looking to back my credit and make it deeper so I got 3 more credit cards 

Cap1, Amazon, and Discover.

 

Now it's Almost May 2017 and i'm looking to get out of my bad loan so i heard good things about Cap1 auto credit so i went there to try and apply for just a New or used car loan and was instantly denied reasoning being "Limited Credit History."

 

What should i do to prepare for getting approved for a Auto loan looking at August 2017.

 

PS. I have no co-signer and down payment would be around 3k 


If you want a good loan you should join and apply with one of the credit unions like DCU, Penfed, Alliant or NFCU.  Capone has been good to folks in general but they almost always get beat fairly significantly.  They gave me a loan at 8.5% and literally 4 days later I refinaced it with NFCU for 4.29% half the interest same number of payments with the exact same scores.  

 

To prep resolve any outstanding collections, reduce your utlization on credit cards to 5% each or less and make all of your payments on time.  I would not add any new accounts because it will impact your average age of accounts and give you recent inquiries.  3 positive credit cards and a postive installment loan should be plenty to get you in good shape.

Message 2 of 7
New Member

Re: Preparing for credit

That Buy Here Pay Here loan I have does not report to any of the bureaus.

Should I still be in good shape?
Message 3 of 7
Valued Contributor

Re: Preparing for credit


@lzach83 wrote:
That Buy Here Pay Here loan I have does not report to any of the bureaus.

Should I still be in good shape?

Then I would join Alliant credit union and do a share secured loan.  Your deposit will be the security they have to approve it, then pay it down about 95% on the second payment and it will give you a postitive installment loan that reports with a substantial amount of the balance having been paid.  This will give you two advantages, it will improve your fico score and will give you that installment history that is essential.  

 

Best of luck,  you can do it.

Message 4 of 7
New Member

Re: Preparing for credit

When I was signing up there seems to be a bunch of stipulations like having to live in IL or being apart of the organization. Is there a way around these? 

 

Thanks!

Message 5 of 7
Valued Contributor

Re: Preparing for credit

Alliant has a "member organization" a non-profit you can donate 5 bucks or some small amount to which then qualifies you to be a member.  That is how I joined a few weeks ago.  They make it very easy.  Just start the membership process online or you can likely do it quickly over the phone.  

Message 6 of 7
Valued Contributor

Re: Preparing for credit

Click on become a member and then click on "another way" which will lead you where you need to go.

Message 7 of 7
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