topic Re: Denied for auto loan with 666 myfico score? in Auto Loans

Denied for auto loan with 666 myfico score?

sherakay — Mon, 20 Feb 2012 13:01:02 GMT

I applied with my hometown credit union in Seattle that I've been with since 1997 for $16,000 on 02/14. They denied me because of my score (pulled from TU) collections and late payments. The late payments are from 2005 when I went through a called off engagement and lots of money was lost in deposits and purchases for the wedding and we were co-habitating and I got stuck with all of the bills. It was a 30 day late on like 2 separate cards. They also said that since I live in LA and they are in Seattle, it's like an unsecured loan so I should apply somewhere locally.

Also, the last month on the rental lease didn't get paid 11/06 and went to collections. Rent was for $900, they added fees which took it to $1445 and now with interest it's up to $2206. I just filed a dispute with TU and EQ. There was also a $105 collections from Time Warner that I forgot all about from 5/07 that I just sent a Pay for Deletion letter to on Friday.

So on 02/16 I applied with American Airlines Credit Union and simultaneously opened an account with them. They denied me too!

Since the statute of limitations was up on these collectionsand I paid off all other legit old debts (before knowing about Pay for Deletion letters) and they were gonna fall off 11/13 and 5/14 respectively I wasn't concerned about them and had been focusing on paying down the almost $5000 I have on CC's. I have a debt use ratio of about 60% that I'm working on getting down to 30%.

My question is, with the 'negatives' on my credit report being 5 years old and my score being 666, I'm seeing so many others on the forum getting approved with lower credit scores. Is it notoriously harder to get approved from outside sourcing such as credit unions and better to go to the dealership? Do I need to wait until both collections have dropped off, or the pay for deletions work, or they at least say PAID for me to get approved even though my credit score is considered fair?

Re: Denied for auto loan with 666 myfico score?

To-Be-Continued — Mon, 20 Feb 2012 13:24:34 GMT

This is where a lot of people get it wrong. Banks don't just look at your score when applying for a loan. They look at your balances lates and collections and if the collections were in the last two years or 1 year for lates you are not going to get a good APR or as you found out easily approved for financing.

Im sure you can get a loan but at what APR 20%?

TBC

Re: Denied for auto loan with 666 myfico score?

StartingOver10 — Mon, 20 Feb 2012 13:58:06 GMT

As pointed out above, your credit request includes more than your score.

How much are you putting down on the vehicle?

What is your income and how much are you planning to spend on your new vehicle?

CU's have guidelines on the DTI. If you are showing 60% utility on your cc's and a history of late pays, then they will require more down to issue the loan. Were the CU's specific with their denial? Did they just mention the credit score, or did they mention other factors?

Also, remember, each CU has its own guidelines so you can be turned down by one or two and accepted by another. But the key here is to first find out what triggered the denial. Usually you can fix the issue by increasing your down payment. The most risky borrower, from a lender's POV, is the one that has no skin in the deal.

Re: Denied for auto loan with 666 myfico score?

Revelate — Mon, 20 Feb 2012 16:15:12 GMT

sherakay wrote:

My question is, with the 'negatives' on my credit report being 5 years old and my score being 666, I'm seeing so many others on the forum getting approved with lower credit scores. Is it notoriously harder to get approved from outside sourcing such as credit unions and better to go to the dealership? Do I need to wait until both collections have dropped off, or the pay for deletions work, or they at least say PAID for me to get approved even though my credit score is considered fair?

It can be. Dealers have an interest in actually selling you a vehicle (for a lot of reasons), and they can work with the lenders they have relationships with to leverage that

In addition to everything else others posted, a CU doesn't have that relationship, and doesn't necessarily care (they have a relationship with you, but if you've only been with them for one day...) they will determine if they're better off lending that money out to someone else, for something else.

If you need a car in short order, I almost always would suggest just walking down to the dealer, usually they will be able to find financing for you at some APR, and if it's higher than what it could be, just refinance it in six months or a year and go from there. You don't have to live with the APR the dealership gives you (assuming you get a loan with no pre-payment penalty which I highly recommend).

Beyond that, to reiterate what StartingOver stated: a downpayment is your, and your lender's, absolute best friend when it comes to financing any vehicle. It's statistical fact: the more money of your own you put in, the less likely it is you're going to flake on the car loan. A downpayment may not get you complete atonement for your credit past, but it sure buys a ton of forgiveness (my car loan is case in point with my scores and my report).

Re: Denied for auto loan with 666 myfico score?

currentlywinning — Mon, 20 Feb 2012 19:08:37 GMT

To-Be-Continued wrote:
This is where a lot of people get it wrong. Banks don't just look at your score when applying for a loan. They look at your balances lates and collections and if the collections were in the last two years or 1 year for lates you are not going to get a good APR or as you found out easily approved for financing.

Im sure you can get a loan but at what APR 20%?

TBC

What of a collection is within the two years, but its been paid? Is that still bad news for the borrower?

Re: Denied for auto loan with 666 myfico score?

To-Be-Continued — Mon, 20 Feb 2012 19:22:18 GMT

currentlywinning wrote:
To-Be-Continued wrote:
This is where a lot of people get it wrong. Banks don't just look at your score when applying for a loan. They look at your balances lates and collections and if the collections were in the last two years or 1 year for lates you are not going to get a good APR or as you found out easily approved for financing.

Im sure you can get a loan but at what APR 20%?

TBC
What of a collection is within the two years, but its been paid? Is that still bad news for the borrower?

I was told by a LO that if you have collections make sure that they are older than two years paid or not. Actually I was also told not to pay the collection because it would update and renew the status date and put me in the under two year window.

TBC

Re: Denied for auto loan with 666 myfico score?

currentlywinning — Mon, 20 Feb 2012 19:33:15 GMT

BUMMER!

I actually paid the collection back in November 2011, so I hope that the effect of it becoming "newer" has died down a little bit...

I have been trying to get these people to delete it, but we've just been going back and forth...I WILL wear them down eventually, just dont know that it will be before I go for the car loan.

Re: Denied for auto loan with 666 myfico score?

MarineVietVet — Mon, 20 Feb 2012 21:22:17 GMT

To-Be-Continued wrote:

I was told by a LO that if you have collections make sure that they are older than two years paid or not. Actually I was also told not to pay the collection because it would update and renew the status date and put me in the under two year window.

TBC

This LO was mistaken. Collections are scored off the Date of Assignment and nothing else. I say that with the disclaimer that this is how it's supposed to work if the coding is done correctly. That can be a very big if at times.

Re: Denied for auto loan with 666 myfico score?

To-Be-Continued — Mon, 20 Feb 2012 21:41:01 GMT

MarineVietVet wrote:
To-Be-Continued wrote:

I was told by a LO that if you have collections make sure that they are older than two years paid or not. Actually I was also told not to pay the collection because it would update and renew the status date and put me in the under two year window.

TBC
This LO was mistaken. Collections are scored off the Date of Assignment and nothing else. I say that with the disclaimer that this is how it's supposed to work if the coding is done correctly. That can be a very big if at times.

I think it was more of an underwriting point of view. In other words she was not afraid of it affecting my score but how the underwriter may see it as recent.

Thankfully I don't have to worry about that lil gem anymore.

TBC

Re: Denied for auto loan with 666 myfico score?

MarineVietVet — Mon, 20 Feb 2012 21:45:49 GMT

To-Be-Continued wrote:

I think it was more of an underwriting point of view. In other words she was not afraid of it affecting my score but how the underwriter may see it as recent.

Thankfully I don't have to worry about that lil gem anymore.

TBC

The UW's seem to march to the beat of a very different drummer at times don't they?? :smileyhappy:

Re: Denied for auto loan with 666 myfico score?

Creditdreamer — Mon, 20 Feb 2012 21:56:03 GMT

I was approved at a dealer with a 498 dealership enhanced score. I applied at a couple different dealerships (normal ones, not shady ones) and was denied because I had collections about a year old and no active accounts, as well as no tax return with my current income available from the previous year. However, at the 4th dealership, I found someone who would work with my situation. I got approved for 16,000 and had to put 4500 down. The car is at 24% but I have it and soon I'll refi. It's possible. And with your scores you should be way ahead of my situation. Good luck!

Re: Denied for auto loan with 666 myfico score?

Revelate — Tue, 21 Feb 2012 00:18:21 GMT

MarineVietVet wrote:
To-Be-Continued wrote:

I think it was more of an underwriting point of view. In other words she was not afraid of it affecting my score but how the underwriter may see it as recent.

Thankfully I don't have to worry about that lil gem anymore.

TBC

The UW's seem to march to the beat of a very different drummer at times don't they?? :smileyhappy:

Hah, no doubt; however, I can't see any UW not preferring a paid collection to an unpaid one. All the ones I've recently talked to have inadvertently substantiated that.

Re: Denied for auto loan with 666 myfico score?

sherakay — Wed, 22 Feb 2012 11:52:34 GMT

UPDATE:

I have a gross income of $3400/mo. I pay $725 in rent. I am currently renting a car and am not in desperate need to buy as the cost of renting is below what the monthly payment and increased insurance would be. I pay $43/mo in liability car insurance after selling my car last fall. Coverage of my rental car is by my Platinum Capital One card when I rent.

I had a car loan from 02/06-04/11 that was paid off and NEVER had a payment late. I thought a positive car loan would be a good thing for an UW to see.

The 2 collections showing on TU and the same 2 showing on EQ plus one additional collection are unpaid, but they are from 2005 and 2006! I didn't make payments because I too was told that it would update the account and keep them on there for longer, so I had been waiting for them to fall off 11/13 and 5/14. The one on EQ that isn't on TU falls off this year 11/12. Because I had a car already and am not planning on buying a house anytime soon, those collections weren't bothering me all those years because I had no need to purchase anything that required a credit check. But due to a career change 11/10 (I became a flight attendant) and driving my car from LA to Seattle and not wanting to drive it back, plus it was getting to the point where I was constantly doing repairs I sold the car and moved back to LA. (My job is why I can afford to rent because I'm not in LA 24/7)

I received the paper rejection letters today and it shows EQ reporting a credit score of 669 and TU reporting 690. Don't know where myfico gets 666 from?

Re: Denied for auto loan with 666 myfico score?

FrugalRican — Wed, 22 Feb 2012 18:45:03 GMT

It's because of that eeeeeeevil "666" number! Oh noes!

Re: Denied for auto loan with 666 myfico score?

Revelate — Thu, 23 Feb 2012 01:59:33 GMT

Heh, tongue-in-cheek commentary side (though I thought it was amusing), lenders don't always use the same scores: the EQ FICO found here is Beacon 5.0, which is incidently what 99.9% of the mortgage industry uses, but auto-loan lenders tend to pull Auto-Enhanced scores (different scoring model than mortgage / credit / normal pulls), and may well be using the newer Beacon 9.0 version instead.

TU is similar, but the score found here is rarely used by lenders these days.

End of the day, any FICO score you can obtain may just be a ballpark, because if the lender pulls something else / some other model, then that's all the matters in terms of approval chances.

Re: Denied for auto loan with 666 myfico score?

sherakay — Thu, 23 Feb 2012 15:01:37 GMT

20 good lines and 7 adverse show on TU. I sent a PFD to CMI and am disputing Fidelity with TU and EQ. Don't know what else I can do.

The baddies on TU are:

1) AES- Student loan- maximum deliquency of 120 day occurred in 9/05- PAY STATUS: Current; Paid or Paying as Agreed

2) HSBC Bank- CC- Credit Card lost or stolen (shows 30 day late in 11/05)- PAY STATUS: Current; Paid or Paying as Agreed

3) HSBC Bank- CC- settled less than full balance- PAY STATUS: Charged Off (I was an Authorized User on this account) Est removal- 9/12

4) Kay Jewelers- Charge Account- maximum deliquency of 60 days occurred in 12/05 Inactive account- PAY STATUS: Current; Paid or Paying as Agreed

5) CMI- Collection Agency- Balance $105 Date Placed for Collection- 9/23/08 PAY STATUS: In Collection- Est removal 5/14

6) Fidelity Info Corp- Collection Agency- Balance $2134 (Shows $2206 on EQ I have filed a dispute with both CRA) Date Placed for Collection- 3/29/07 PAY STATUS: In Collection- Est removal 10/13

7) NCO Financial- Factoring Company Account- Date Placed for Collection- 10/24/07- PAID Collection PAY STATUS: Account Paid in Full; was a collection- Est removal 2/13

Re: Denied for auto loan with 666 myfico score?

To-Be-Continued — Thu, 23 Feb 2012 15:18:02 GMT

sherakay wrote:
20 good lines and 7 adverse show on TU. I sent a PFD to CMI and am disputing Fidelity with TU and EQ. Don't know what else I can do.

The baddies on TU are:

1) AES- Student loan- maximum deliquency of 120 day occurred in 9/05- PAY STATUS: Current; Paid or Paying as Agreed

2) HSBC Bank- CC- Credit Card lost or stolen (shows 30 day late in 11/05)- PAY STATUS: Current; Paid or Paying as Agreed

3) HSBC Bank- CC- settled less than full balance- PAY STATUS: Charged Off (I was an Authorized User on this account) Est removal- 9/12

4) Kay Jewelers- Charge Account- maximum deliquency of 60 days occurred in 12/05 Inactive account- PAY STATUS: Current; Paid or Paying as Agreed

5) CMI- Collection Agency- Balance $105 Date Placed for Collection- 9/23/08 PAY STATUS: In Collection- Est removal 5/14

6) Fidelity Info Corp- Collection Agency- Balance $2134 (Shows $2206 on EQ I have filed a dispute with both CRA) Date Placed for Collection- 3/29/07 PAY STATUS: In Collection- Est removal 10/13

7) NCO Financial- Factoring Company Account- Date Placed for Collection- 10/24/07- PAID Collection PAY STATUS: Account Paid in Full; was a collection- Est removal 2/13

Dispute #3 trade line with the big 3 as not your account because technically it is not your account. AU accounts are very easy to remove. So it now looks like you are down to 6 baddies. I would send out GW letters asking for the lates to be removed on #1 #2 and #4
On #7 I would send out a GW asking them to remove aswell.

TBC

Re: Denied for auto loan with 666 myfico score?

sherakay — Thu, 23 Feb 2012 22:48:42 GMT

Thank you for the advice. So what basis do I have for the GW letter? What do I offer them?

Re: Denied for auto loan with 666 myfico score?

To-Be-Continued — Fri, 24 Feb 2012 00:42:19 GMT

A heart felt letter explaining why you were late, and that you are a loyal currant customer that fell on hard times like many Americans.

Search GW letters, but I recommend that you put it in your own words.

TBC