amex for student / low income

[folks19]

hi! i'm a student with very low income, (about 6k annual income). i checked to see if i will pre qualify for amex, and i did for some cards. do i really have a chance of getting upproved? how likely am i to get approved?

[Anonymous]

Might as well try your luck 

[folks19]

do you have any experience with this?

[Anonymous]

Usually Amex's prequals are solid. I'm a student, too, but with income of ~30k and prior history. If you already have some cards open then you should be fine, but if you have limited history (i.e. no history or <1 year) then I would go with the Discover it student version since I've seen people get approved with no credit history at all. That being said, Amex is friendly to thin files.

[folks19]

i have less then 1 year history. my fico score is about 670. i have a credit builder loan and the discover secured card, which is no longer secured because they returned my deposit. do i have a chance?

[Anonymous]

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@folks19 wrote:

i have less then 1 year history. my fico score is about 670. i have a credit builder loan and the discover secured card, which is no longer secured because they returned my deposit. do i have a chance?

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I'd wait until your youngest account is at a year.

What were you prequalified for? Usually the co-branded are easiest to get, followed by the charge cards (i.e. Gold, Platinum), followed by the core cards.

[folks19]

i was prequalified for the blue cash everyday, the gold card, and the green card. i will follow your advice and wait a year. i also want to wait to pay off my credit builder loan because taht just adds more debt, and my score dropped like 30 points when i opened it, so hopefully i will regain the points once the loan is paid. i opened it to  have a more credit mix, but i regret it now!

[Anonymous]

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@folks19 wrote:

i was prequalified for the blue cash everyday, the gold card, and the green card. i will follow your advice and wait a year. i also want to wait to pay off my credit builder loan because taht just adds more debt, and my score dropped like 30 points when i opened it, so hopefully i will regain the points once the loan is paid. i opened it to  have a more credit mix, but i regret it now!

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You took a hit because it is at 100% util when you opened it and it is a new TL. It also helps show solid, consistent, on-time payment history every month that you pay it. I would not pay it off right away, especially with a thin profile and no other open installment loans. Thinner profile's scores fluctuate more drastically with any changes. The more you keep up paying it every month and the balance goes down, the higher the score will be because of lower util%. If you pay it off quickly you lose the credit mix points. Stick with it, it will help in a few more months after it increases your credit history and the util goes down!

[folks19]

Thank you @Anonymous. as far as I understand, only revolving accounts count towards utilization. I do hope my score goes back up. Also, are you sure I lose the loans contribution to my credit mix when it's paid off? I'm just asking. I won't pay it off early regardless.

[Anonymous]

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@folks19 wrote:

Thank you @Anonymous. as far as I understand, only revolving accounts count towards utilization. I do hope my score goes back up. Also, are you sure I lose the loans contribution to my credit mix when it's paid off? I'm just asking. I won't pay it off early regardless.

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There is a seperate "installment" util. And every credit product has util, whether or not it is included into your "revolving" util.

Every installment loan (including auto and mortgage, even with a 99% down payment) starts at 100% for that credit product. No matter what. 

I have 3 CCs and 1 Installment loan

So for example off my EQ CR:

We have so much credit info to juggle! Installment util, revolving util (individual and aggregate), overall util, and DTI! I hope this clears that up!

Edit: to answer your question, yes, you will lose credit mix points. Even though it will remain on your CRs for 10+ years (as long as it is a positive/satisfactory account), you lose the points once it hits 0% util. Just like CCs. If at any point you have all your CCs at 0% util, you lose points vecause there is nothing to rate. Counterintuitive, but true. That is why many suggest having more than 1 CC and implement AZEO (for people building/thin profiles, rebuilding, or about to make a big app). This is to squeeze more points out. Once you have a strong and thick profile or if you do not plan on any apping, that is less important. You can pay down all but 1 CC to 0%. The non-zero card at 8.9% or under, which is the lowest scoring threshold for max points. I may be simifying a bit, but you can search the threads and there are tons of discussions on credit, thresholds, and scoring.

Good luck!