Opening a CC to boost credit score?

[Anonymous]

Hello!

I'm currently in the market for a new car, but am fearful to pull the trigger while my credit scores hover around the 660's.  My reports aren't bad, but I think the reason why my scores aren't super great is because of my utilization, types of credit and length of credit history.  I have ~$70K in student loans from grad school - opened from March 2011 - that I'm diligently paying every month (never late, and I try to pay a bit extra when I can!), plus an old/closed auto loan with BMW from 2004 to 2009 that is fully paid/never late. That's it.  So I have a thin file.  Given that I'd like to make my new car purchase 4 to 6 months (July/August/September) from now, is it adviseable for me to open a credit card right now (March) to boost my credit scores?  Is that enough time for me to see the benefits of new credit with wise usage and on-time payments between now and then (eg, at least a 50 to 100-point boost to my scores all around)?  Please advise - I was going to visit my credit union tomorrow morning to see what my options were on the credit card front.  

For reference (if it's helpful), I'm about 4 months in at my new job, where I earn $95K plus bonuses (~5%), and I do some consulting outside of my job that earns $45/hour (so I potentially earn anywhere from an extra $2K to $10K/year with the extra work).  I am contributing the max allowed to my 401(k) as well.

Thanks,

BellePepper

[Pway]

What credit cards do you have open?  What is the utilization on those cards?

[Anonymous]

I have NO credit cards.  Hence the crap score! Lol.

[Pway]

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@Anonymous wrote:

I have NO credit cards.  Hence the crap score! Lol.

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Yes you need to get some credit cards in the mix of your credit.  Credit unions are a great start.  Yes you should visit a credit union and talk with a banker about opening a credit card.  Yes you should see quite a boost when that first credit card report.  If you are waiting four or fiev months for an auto loan, then you are doing the right thing.  Getting those scores as high as possible to get the best rate of approval.  Ideally three credit cards needs to be open to get maximum scoring in Fico eyes.

[Anonymous]

I thought that might be the case, but my big worry was that it would lower the average age of my credit history, which is already sort of "young" to begin with.  Would that hurt me at all?  

[Pway]

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@Anonymous wrote:

I thought that might be the case, but my big worry was that it would lower the average age of my credit history, which is already sort of "young" to begin with.  Would that hurt me at all?  

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Yes opening cards does affect your AAOA.  Nothing to worry about though if you are not opening a ton of credit at one time.  Your AAOA will regain as time goes on.  

[Anonymous]

Sorry, what is an AAOA?  Newbie here.

[Anonymous]

Ah, duh.  Average Age of Accounts.  

[Pway]

No problem.

[Anonymous]

Well now this is strange.  I had based my 660 scores off of the FAKO ones I got from creditkarma and mybankrate.  I just purchased scores from myfico and low and behold, my Equ is 729, my TU is 744, and my Exp is 732.  Of course there's a slight variation based on whatever version of FICO I'm looking at within those 3 agencies, but they're all still in the low to mid 700's.  

I ran the simulator to see what benefit - if any - a new credit card would provide, and it tells me my scores would increase.  Now I wonder if getting a card is still recommended - I don't necessarily need the credit but it would be nice to have, I suppose.  When I spoke with the dealership's finance manager, she recommended NOT opening any new credit card accounts - she warned that too much "movement" a few months prior to my purchase would negatively impact my chances of getting a good car loan rate.  She also told me they rely heavily on the Fico 8 and Transunion; unfortunately, the package I purchased from myfico doesn't show my Fico 8 with any of the credit reporting agencies.