Open a new Credit Card or wait until after Auto Loan?

[AnaMKMK]

Hey All, I'm a little confused which will be better...... I don't need a new credit card, but do need a car. I don't want a new credit card, but I want a better score.

I've used the credit simulator that tells me if I open a new cc my score can increase 17-30 pts; this will put me at scores of 670-700 if I get just 17 pts.

The same simulator told me my score would go +/- 15 pts for getting an auto loan.

I'm tempted to open the credit card and then get the car, but how much should I trust the simulator? I'm already borderline for not so good rates on the new car and don't want to make the situation worse, but if a new cc helps i'm all for it.

Thoughts?

Thanks!

[marty56]

When I got my mortgage 4 years ago, the told me not to open any new account during that time period.  I dont trust the simulator becuase it is off on my scores by being too low.  I suppose its better than being too high.

ScoreWatch shows autoloan interest rates based on scores but I dont know how accurate they are.

I can repeat some good advice that was posted here in going to a credit union with your cred reports and see what they could do for you just by looking at you scores and not pulling your CR.  Also I understand that delars look at your autoscores as well which are scores that favor how you paid your car loans.

Also some delars may have specials that may only last for a few weeks and you may have to wait longer for you credit score to rise thus shooting yourself in the foot.

[AnaMKMK]

I know about the AUTO-FICO or whatever its called, but from my understanding its based on your previous car loan. Unfortunetly for me - my previous loan was my first car and it was in my parents name - payments were made to them monthly, but I doubt that helps. Without a car on my report, my AUTO-FICO will be lower....I think....

So in either case, I want to raise my FICO as much as possible before buying a new car.

[Anonymous]

In my experience- the "New Credit" portion of the simulator in mostly based on increasing the available credit - what are your current revolving balances and CL'S?

[marty56]

I take it then that they didnt co-sign the loan and it was entirely in their name so it didnt show up on your report.  Your autoscore still could be higher then your regualr FICO score though.  I would still try a Credit Union or even online pre-approval with a car company.  I understand that mulitple hard pulls on your credit report for an auto loan only counts as one over a 14 days period but I dont think that is enough time for your score to rise after getting a new credit card.

Are you concerned with interest rates or approval in terms of your FICO score?

If you dont have a lot of new accounts and hard pulls I would take the plunge and try pre-approval and see what happens.

[Anonymous]

Ana, one thing I do know is that if you apply for any new credit, your scores will drop, and will take about a year to recover.

I've heard it said here many times, do NOT apply for a credit card, if in the near future you are going to apply for a car loan, or mortgage.

So if you actually don't need another cc, wait until 6 months AFTER you get the car loan. But that's just my opinion.

[AnaMKMK]

Sylvia.... I've heard the same thing, that a new card will lower my score, but the simulator says otherwise. I'm just not sure if I should trust the simulator. I really don't want a new card, but if it means a credit score in crease i'm all for it, especially if it'll make the auto loan have better rates.

I've already pre-approved through Capital One's program, but the interest rate was 11% and it lapsed about a month ago, so I'll need to go through the process again, my score is higher now so hopefully I'll get better rates, but in the meantime i've decided to go with a new car vs. used so hopefully dealer financing will offer better rates. Before I walk into that dealership though I want to make sure my score is as high as it could be....

[AnaMKMK]

Timothy.... I currently have 5 credit cards (2 mc, 1 visa, 1 dept store (low limits) and a care credit card); all but 1 are at 15%, adding that last one in puts me at about 54%. I've paid a ton off this last month and expect that to fall to 30% overall.

I'm anxious to pull my current report because once everything updates I'll get a much clearer picture of what an additional card will do for me. But if I sign up for this new card and with that they've pre-approved me for i'd end up with about 7% utilization.

I'm also anxious to get a higher score, so if going from 30% to 7% utilization will give me at least 15-30 points i'm all for it!

[SmartCookie]

Have you checked with your cc co's to see if any of them will give you a CLI without a hard INQ?  If not... that's a painless way to improve your UTI.