Hi Community,
I am a new immigrant to the US and so I still have a thin file.
Trying to build credit for 2 specific goals:
1. Car Loan in 2020
2. House Loan
Background:
I'm a 25 years old, 70k income.
Also opening a side business in a couple of months, so I will have more income, but I have no numbers to provide yet.
My credit history started with denied Citi Costco application in November 2018 due to no history (empty file) because I didn't know that I have to go through secured cards way.
So, I opened Discover It Secured with 300$ limit which was graduated 7 months later with a CLI to $2000, and 3 months later to $2600.
Discover also lowered my APR per my request after 12 months to 19.74% (was 24.49% before).
I have a checking account with Chase as well as I opened my CFU 4 months ago with $1200 SL @ 25.24% APR.
I carry utilization of 0-1% on both cards.
Goal #1: Car Loan in 2020
Basically I am taking this step in order to be more qualified for a house loan later. I would be looking for a car around 20-25k USD and 15-20 k loan, rest is the downpayment.
I read multiple threads that it is best to do not have any hard inquiries during the last 6 months before applying for a car loan. But I think that right now with 2 CC and so low limits I am not the best candidate for a car loan of 15-20k, so I am trying to open 1 or 2 more accounts in the next 30 days.
I am looking at Citi Costco card and maybe Amex BCE. I know that valued members here advise applying for Citi with at least 1 year of AAoA, but I will proceed at 9 months in February. The only question I have is should I apply for both of the above cards on the same day? I want to do so to have 4 accounts before I apply for a car loan and no activity for the next 6 months. I am not sure if 2 applications considered an app spree but I am okay with my score to drop 30-40 points now and recover and hit the highest ever in 6 months just right for the car loan. What are my chances to get approved for both on the same day you think? Any other cons doing it this way?
Goal #2:
Later down the road, not sure if this goal requires 2, 3 or 4 years !? My immigrant friend was building a perfect history for 7 years to get a home loan, so idk but that's so long.
I want to buy a house and rent all the rooms to other people while I still work and do business, so I pay it off as soon as I can and potentially repeat this step again by buying another house and living in it while renting the first one completely to other people.
I need some help getting there! I know that I'm a thin file, and I'd appreciate your help in developing a plan to improve my profile before then. I know that I have a lot to learn, and I'm glad to hear from people who are more experienced.
Other goals on the way to Goal #2:
1. To get a Chase Trifecta (CSP in October 2020 when my CFU is 1 year old + Business Ink in February 2021 so I am below 5/24 rule in case I apply for Citi + Amex BCE on the same day around now)
* No other cards I want at this point in my life. Maybe they will appear later. Or if you have a good suggestion, please let me know.
* Should I find someone who can add me as an AU to a card with a good limit and low utilization? Will it help me?
Thanks for the feedback/help.
Luv to myFico Forum!
You have a number of things going on, but I don't think the timeline needs to be anywhere as long as you stated.
For the car, with your current scores and the amount of the down payment, you should have no problems getting a loan whenever you are ready to buy one as it's a secured loan where the item securing the loan is more valuable than the loan balance. If you are buying new, you would probably qualify for manufacturer financing, which can be almost nothing. New or used, a credit union would certainly offer very low and competitive rates. Unless you have no need for an auto loan, I would probably do that prior to any new credit card applications. You mentioned you would be taking the auto loan in order to be more prepared for a mortgage; a share secured loan (SSL) from a credit union would likely provide a greater score boost at a lower cost as you could immediately pay more of it off compared to an auto loan without it affecting the length of the loan.
I wouldn't get any new credit cards as a means to obtaining a mortgage or auto loan. In the short term, that would likely hurt you more than help you. It's unlikely that 2 new applications for credit cards would affect your FICO scores as much as you stated, but I wouldn't want to appear too credit-seeking prior to a loan application.
I know several people who have purchased multi-family homes as you're looking to do within a few years of arrival in the US. You've already built up enough of a credit profile that you may already be eligible. Getting your scores up higher could certainly lead to lower interest rates, but since you plan to use the majority of the property for rental income, it's likely that you can pay the loan off aggressively and you can always refinance later after your scores have improved even more. If you have the means to do it, I would probably pursue that prior to any other applications, as mortgage underwriting will be most sensitive to new accounts and inquiries.
The cards you mentioned sound like they are a good fit for you, so while I might delay the time before you apply, none of them are bad cards at all. I would say that if you can be added to older accounts with low utilization from an immediate family member that you share an address with, it's fine. But I would caution against those who sell tradelines, adding authorized users for a fee. Credit scoring will mostly or completely disqualify those accounts due to rampant abuse, and many internal scoring methods will discount AU accounts completely.
Thank you!
Just read a lot about shared secure loan...didn't hear about it before! Very useful and I might use this option, but I can't figure do they lock 100% of a loan at the account you funded and do they HP your report at all if basically you are borrowing to yourself !?
Also, wanted to see what are you thinking about the idea of applying for Citi Costco and Amex BCE on the same day? Like is there a way to click that apply with like 5-10 sec difference so they both dont see each others HP ? Cause as per my research they both pull EX.
And the last one... does a car loan pr Shared secure loan affects 5/24?
@K-in-Boston wrote:You have a number of things going on, but I don't think the timeline needs to be anywhere as long as you stated.
For the car, with your current scores and the amount of the down payment, you should have no problems getting a loan whenever you are ready to buy one as it's a secured loan where the item securing the loan is more valuable than the loan balance. If you are buying new, you would probably qualify for manufacturer financing, which can be almost nothing. New or used, a credit union would certainly offer very low and competitive rates. Unless you have no need for an auto loan, I would probably do that prior to any new credit card applications. You mentioned you would be taking the auto loan in order to be more prepared for a mortgage; a share secured loan (SSL) from a credit union would likely provide a greater score boost at a lower cost as you could immediately pay more of it off compared to an auto loan without it affecting the length of the loan.
I wouldn't get any new credit cards as a means to obtaining a mortgage or auto loan. In the short term, that would likely hurt you more than help you. It's unlikely that 2 new applications for credit cards would affect your FICO scores as much as you stated, but I wouldn't want to appear too credit-seeking prior to a loan application.
I know several people who have purchased multi-family homes as you're looking to do within a few years of arrival in the US. You've already built up enough of a credit profile that you may already be eligible. Getting your scores up higher could certainly lead to lower interest rates, but since you plan to use the majority of the property for rental income, it's likely that you can pay the loan off aggressively and you can always refinance later after your scores have improved even more. If you have the means to do it, I would probably pursue that prior to any other applications, as mortgage underwriting will be most sensitive to new accounts and inquiries.
The cards you mentioned sound like they are a good fit for you, so while I might delay the time before you apply, none of them are bad cards at all. I would say that if you can be added to older accounts with low utilization from an immediate family member that you share an address with, it's fine. But I would caution against those who sell tradelines, adding authorized users for a fee. Credit scoring will mostly or completely disqualify those accounts due to rampant abuse, and many internal scoring methods will discount AU accounts completely.
Hi, so I researched more and more...And I think I have decided that the primary goals are: Car Loan in 2020, CSP as soon as possible.
So, I have 2 potential schedules of applications:
1) Next App is CSP in July 2020 - will have 2/24 and 1/12 at that time
Citi Costco + Amex BCE in February 2021 withing seconds apart - 2/24 and 1/12
* I can even skip Citi Costco at all because with CSR in the future and holding all the point on CFU I will need Citi only for fuel...and considering I am moving to TX next months... fuel is cheaper there, so I will be saving just 17$ more a year on fuel in comparison with CFU.
Chase Ink Business Cash in October 2021 - 3/24 and 2/12
CSP PC to CSR in August 2022, after 48 months.
2) Amex BCE in February 2020 (now) - 2/24 and 1/12 at the moment
* I only need Amex BCE for that 3% groceries and $200 SUB, but can hold and use my CFU at 1.5%.
CSP in October 2020 - 3/24 and 1/12
Chase Ink Business Cash in April 2021 - 3/24 and 1/12
CSP PC to CSR in November 2022, after 48 months.
Considering that I need a new car in 2020, cause my car is old and I need an update. Also considering my desire to get CSP asap, what would be the best action plan? Does car loan affect my CSP chances? Should I get CSP first and then a car loan or vice versa? Should I have 6 months between a car loan and CSP application if I get a car loan first?
Would appreciate your thoughts!
Thank you!