Should I try to get a credit card now? (Hard Pulls)

[Anonymous]

Hello,

I am just starting to build my credit now that I am finacially and job secure after graduating from college. I just recently tried to apply for the Discover It card after reading some reviews saying it is a great first card, but was denied due to a high number hard pulls on my credit.

The current hard pulls (from credit karma and nerdwallet) are:

My first 3-year loan for a car in March of last year. (~$3000 balance currently)

Two (one?) this January for a pre-approved mortgage through my current bank and quicken loans to get an idea of how much house I can afford. Atleast I can say once I have the credit there will be no problem getting the loan amount I want.

One from Verizon this month for moving to my own account.

I assume the application for the Discover card will add one and when my auto insurance is transfered to me this will also count as one.

Due to the number of hard pulls I have should I worry about getting a credit card right now? I was looking at the Capital One Quicksliver or Plantinum Card. Are there other cards I should look at? Since I drive over 100 miles a day to work 90% of my purchases would be gas, A BP card maybe? I will have 3 main lines of credit (Car loan, Insurance, phone bill) and I'm not expecting to buy a house in atleast 6 months or add any more lines of credt before I buy a home. If it helps, I do not pay rent since I still live at home and I have $15000 in assets if it matters when I apply.

Also, Quicken Loans said I had a credit score of 682, credit karma says 645/652, then Discover said 672.

Thanks

[Chris679]

Mid 600 scores would indicate you have negative account information on your report that was the reason for denial and not the inquries. That may be listed as a reason for why your score is low but it is most certainly not the main reason. Getting your hands on free copies of your credit reports would be step one.

[Anonymous]

Thanks for the response.

What kind of things would account as negative account info? From Credit Karma and NerdWallet, I only have 1 account, my car loan at 100% on time payments, even though it's going to be 3 very soon. My age of credit is also only 11 months, which will drop when I add my phone bill/ car insurance. 0 Derogatory marks. Anything else I should look at?

[dragontears]

I have never had car insurance nor phone show up on my credit report. So you only have the 1 tradeline, I do think you should open a credit card. Cap1 is a good starter CC company.

[Anonymous]

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@dragontears wrote:
I have never had car insurance nor phone show up on my credit report. So you only have the 1 tradeline, I do think you should open a credit card. Cap1 is a good starter CC company.

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That's interesting. When I went through my current bank to see what they would give me for a pre-approved mortgage and they strongly recommended that I started paying for these and having it pulled automatically from my checking as it would be two more trade lines. Maybe it would only count as tradelines for them?

[dragontears]

For a mortgage they can be counted as an alternative tradeline to show you can pay bills on time but they still won't show up on your reports

[austinguy907]

4-10 inquiries shouldn't be much of a turn off when it comes to applying for a CC.

Why did you have the bank pull your scores for a mortgage?  Are you actually planning on buying something in the next 60 days?

Insurance and cell phone bill don't count as CREDIT..... they just use credit to determine your rate for insurance and whether or not you pay up front for the phone.

Typically for a mortgage if you're actually looking for something to buy in the next 6 months your options for which programs offered by different lenders may be limited.  The reason for that will be that most of them look for 3-5 tradelines with 2+ years of payment history.

Scores in the mid 600's though isn't a bad place to start if you don't have anything else on your file other than a car loan and student loans.  First thing you'll want to do is read up on how credit works and come up with a plan.  Don't go applying for a ton of pointless accounts just to gain the tradelines.  Don't pre-app for a mortgage if you're not actually shopping for property.  If you're shopping for property there's been plenty of people looking for a place for 6 mo's to a year or more.  Just apply for the pre-app when you find the right place.  Most brokers can close within 30 days if you provide them with all of the docs they ask for within 24 hours or less.

CC's are hard to get vs car loans because there's nothing for the bank to take back if you default.  It may even be advisable to get a couple of secured accounts to start off with that are worthy of your deposit.  Discover can do one up to $2500 and they start reviewing your account at month 7 for potential conversion to a regular card.  Once they convert they grow well.  6-12 months of use / payments with such a card will boost your profile for future approvals and higher limits as time passes.

[Anonymous]

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austinguy907 wrote:

4-10 inquiries shouldn't be much of a turn off when it comes to applying for a CC.

Why did you have the bank pull your scores for a mortgage?  Are you actually planning on buying something in the next 60 days?

Insurance and cell phone bill don't count as CREDIT..... they just use credit to determine your rate for insurance and whether or not you pay up front for the phone.

Typically for a mortgage if you're actually looking for something to buy in the next 6 months your options for which programs offered by different lenders may be limited.  The reason for that will be that most of them look for 3-5 tradelines with 2+ years of payment history.

Scores in the mid 600's though isn't a bad place to start if you don't have anything else on your file other than a car loan and student loans.  First thing you'll want to do is read up on how credit works and come up with a plan.  Don't go applying for a ton of pointless accounts just to gain the tradelines.  Don't pre-app for a mortgage if you're not actually shopping for property.  If you're shopping for property there's been plenty of people looking for a place for 6 mo's to a year or more.  Just apply for the pre-app when you find the right place.  Most brokers can close within 30 days if you provide them with all of the docs they ask for within 24 hours or less.

CC's are hard to get vs car loans because there's nothing for the bank to take back if you default.  It may even be advisable to get a couple of secured accounts to start off with that are worthy of your deposit.  Discover can do one up to $2500 and they start reviewing your account at month 7 for potential conversion to a regular card.  Once they convert they grow well.  6-12 months of use / payments with such a card will boost your profile for future approvals and higher limits as time passes.

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At the time I was planning to buy something cheap that would require a little fixing up to build equity, even these home can only be on the market for only a couple days where I'm looking to live. I will also admit I still live with my parents and it would cut my comute to work in half from 55 miles one way, I got a little ahead of myself on buying a home. Since then I have taken the time to sit down and truly understand how credit works.

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dragontears wrote:
For a mortgage they can be counted as an alternative tradeline to show you can pay bills on time but they still won't show up on your reports

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Thats good information to have. I'm glad I found out about this now, Thanks.

I was also able to sign up for a Capital One card without any issues.

Thanks for the advice.