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Good or bad idea?

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Anonymous
Not applicable

Good or bad idea?

I currently have a car through a not so great finance company that only reports every 3 months and I'm trying to build my credit as some here know.

 

My monthly payments are $250 and are always made on time. 

 

I was thinking this morning of opening a secured card through Open Sky or something similar and adding $500 - $700. Would it be wise to do this and use that card to pay my car loan each month and then have the money paid back to the secured card automatically and get a boost twice on my credit report, or would it do more harm than good because of the open accounts?

 

Thanks

Message 1 of 10
9 REPLIES 9
Anonymous
Not applicable

Re: Good or bad idea?

If you don't have any credit cards, opening up a secured card or two will help your score.

 

Paying your car loan with it won't give you a double boost, but you don't have to actually use the credit card all the time to increase your score. Just having on time payments report is all you need, so use it for a small bill (netflix? Power bill? Something you pay every month anyway) and pay it at the end of the month. Your scores will rise rapidly.

Message 2 of 10
elim
Senior Contributor

Re: Good or bad idea?

Having positive reporting accounts is a necessity to build credit.  Go for it.

Message 3 of 10
Anonymous
Not applicable

Re: Good or bad idea?

Well I know I won't get double, but I would have 2 different things reporting though instead of one.

Message 4 of 10
RobertEG
Legendary Contributor

Re: Good or bad idea?

Obtaining new credit may involve additon of a hard inquiry, and will, if approved, result in the addition of a new account with zero age, thus affecting your avg age of accounts.

Those hits may be offset if the consumer has a thin file and needs addtiional revolving accounts for their mix of credit and to improve theri % util, but could involve a short-term scoring hit.  It depends upon their individual credit file.

 

Does the new secured card do a hard pull, do they charge an annual fee, and how many revolving accounts do you currently have?

Message 5 of 10
Anonymous
Not applicable

Re: Good or bad idea?

The only accounts I have open and reporting right now are a Secured card from my bank, Fingerhut Fresh Start and my car loan. The Open Sky card does not do any kind of pulls.

Message 6 of 10
Anonymous
Not applicable

Re: Good or bad idea?

I thought paying my car payment w/ my cap1 card was a good idea for usage, until I noticed the cash advance charge. It could just be my finance company, but the way they ran my card apparently looked like a cash advance- I was quite sad, and now my car payment is the only bill I pay cash for, as I use my utility bills for usage on my cards! 

Message 7 of 10
elim
Senior Contributor

Re: Good or bad idea?


@Anonymous wrote:

I thought paying my car payment w/ my cap1 card was a good idea for usage, until I noticed the cash advance charge. It could just be my finance company, but the way they ran my card apparently looked like a cash advance- I was quite sad, and now my car payment is the only bill I pay cash for, as I use my utility bills for usage on my cards! 


   Cap One's 2% convenience checks may work on a high APR auto loan.   ;]      Deposited in account first and paid off in the 12-18 month 0% period while paying interest payments on any remaining balance of your auto loan.

 

I guess you would have to do the math first to be sure.

Message 8 of 10
Anonymous
Not applicable

Re: Good or bad idea?

Why the fear of pulls? Have a lot?
Message 9 of 10
Anonymous
Not applicable

Re: Good or bad idea?

Mixing a credit card with your car payment won't really give you any extra boost than just having thr credit card. Maybe I'm not understanding. Plus opensky is notorious for taking forever to update balances after payment, in think you'd be taking a risk if you're talking about auto pay. Take the hard pull and get a CC thst will graduate. Are you sure you can't get an unsecured card?
Message 10 of 10
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