Should I apply for a new credit card if planning to take a loan soon?
Planning to apply for a car loan (around $15,000) in the next 2 months. But I’m also considering to get a travel credit card with sign on rewards as I will make some large purchases this month/next month (around $5,000) and upcoming travel plan abroad. I’m worried that if I apply for a credit card now, it will affect my chance to get a good car loan and APR negatively. My current FICO score is ~756 and 2/24 (per Chase rule). 4 months ago, when I applied for a Chase credit card, my FICO score reduced 20 points. So I’m worried this time the credit card hard pull could reduce my FICO score 20-30 points (let’s say 720). Do you know how much difference the auto loan APR for FICO 750 vs 720 at DCU? Will FICO 720 still give me the best rate? If not, how big is the gap and should I refinance the loan as soon as my credit score increases to get a better rate? I’m trying to see the trade off here, if I don’t apply for the credit card now, I may miss out $800 worth reward points and the opportunity to use it for my upcoming travel plan. So which one is a better choice? What is my best strategy? Update: I’m now leaning more towards applying for the credit card first. Let’s say, the auto loan APR difference between FICO 750 vs 720 is 2%? If I apply for the credit card first, got $700 worth reward. My FICO reduces to 720. Then I apply for an auto loan, the APR I got is 4% (instead of 2%) for $15,000 loan. So the trade off I’ll make here is $700 - $15,000*2% = $400 (and after a year, I can refinance the car loan to get a better rate). Still a good decision? Please correct me if I’m wrong Thanks! TC: 🥜
You generally need a 670 to be considered for prime and 780 for super prime auto rates. A hard inquiry + decrease in avg account term + carrying high balance may lower you below ~700 for 2-3 months (but we’d need to see your full credit profile to determine that)
I'm from Toronto so YMMV. When you apply for a credit card, banks do a hard check on your credit score which is why your score goes down. You have multiple options - apply for a card n loan from the same bank and tell them about your plans so none of your applications are affected - apply for car loan first and then for credit card. I believe your car loan should be valid for at least 3 months - the dent on your credit score from credit card application should last only few months (anywhere between 3-6 months but not sure). You can delay your car loan till the time your score is not normal
Sounds like you're about to take on at least 20k in debt while making peanuts (a cop out on your tc) plus whatever you spend on your trip. Is there a rush on the car loan? Trip is time sensitive as it sounds like it's already planned...and FICO isn't the only score they go by.
TC or GTFO
Go for it. Won't matter a lot. Checkout DCU for car loan. Many of my friends and I got the best in market car loans. 1 inquiry shouldn't dent the score. Assuming you have at least a couple of years of history
You know what’s crazy, i dont see your TC
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