How long should I wait until I can apply for credit again?
Well in June I applied for a student loan. My score was 649. It then proceeded to drop to 608 which is down right depressing. And I wasn't even approved. So I won 2500 two weeks ago from a scratch off and used that and paid off my credit cards. (about $678). My credit score is now 692. I was thinking about taking the rest of the money ($1700) and putting it towards a down payment for a car lease. I was thinking about a Ford Fiesta or Focus. What are my chances of being approved? I'm 19 years old college. I work full time at Target. I've been there since September 2012. My credit score is 692. I make $8.50 an hour and my checks are usually $650+ before taxes. I bring home about $1100 bucks a month. I live with my mom so all I really pay is my cell bill, and my car insurance. The car I have is currently paid off and slowly falling apart (98 Chevy Cavalier).
Or should I wait some to apply for credit? I'd rather not apply versus getting rejected because I don't want to lower my score.
Comments
Six months or so. Paying your bills on time, keeping your credit utilization low, and time are your allies here.
The most important factor Fair Isaac & Co. uses when setting your FICO credit score is your payment history. FICO rewards you for paying your credit card bills and loans on time.
The second most influential factor is the ratio of your total debt to your available credit. When you paid off your cards you saw an immediate boost to your score, and this factor is why. The lesson here is to keep your credit utilization low. Don't max out your cards.
The length of your credit history is the third-most influential factor. The longer you have a positive credit history the higher your score will go. If you keep paying your bills on time and keep your credit utilization low, your score in two years will be higher than it is today simply due to the passage of time.
When you do apply for more credit cards, apply for a different type of card. For example, if you have a general-purpose Mastercard or Visa today, apply for a department store card or one from a gasoline retailer. A car loan would be another diverse addition to your portfolio. FICO rewards people who manage a diverse array of debt.
You mentioned a student loan. I assume you applied for and were denied a private student loan. The lender did you a favor. In almost all ways, federal student loans are superior to private student loans. Follow the link in Source(s) below to the Dept. of Education FAFSA Web site to apply for a federal student loan.
" bring home about $1100 bucks a month. I live with my mom so all I really pay is my cell bill, and my car insurance." Do you really plan on living with your mom for the next 3-4 years while paying on a leased car? If not, you may want to sell the car you have now, put it with the left over money and buy a better used car.