topic Re: Will I approve for a new auto loan? in Auto Loans

Will I approve for a new auto loan?

deedub626 — Tue, 10 Apr 2012 02:19:48 GMT

I been shopping around for a car and hoping you guys can provide some insight.

Credit started on 2006. Current credit score is around 656. It was around 680 before i took on the One Main Financial loan (took out that loan about 2 months ago).

Wellsfargo CC- $2479 of $2600

Citi Bank CC- $1800 of $2000

Citi check plus- $350

One Main Financial loan- $4000

Gross income is 44k

I am looking to buy a new 2012 corolla.

what are my likelihood to getting the loan approve? My payments are always on time and is never late.

Re: Will I approve for a new auto loan?

sherakay — Tue, 10 Apr 2012 08:15:15 GMT

Your Wells Fargo is maxed out. I learned this the hard way. Make sure no CC's are ever over 90% utilized. That counts as maxed out and it looks like you're overextending yourself.

Re: Will I approve for a new auto loan?

Revelate — Tue, 10 Apr 2012 17:36:17 GMT

How much time do you have and how much cash do you have laying around?

Both the Citibank and the WF cards are highly utilizied, out of curiosity what did the personal One Main financial loan go to?

Personally I'd see about getting my credit cards paid down before I went car shopping, you're borderline prime, and you'll get a sold boost from paying off your credit cards which might kick you to the top tier for TFS. You can probably get financed now; however, if you can wait for 5-6 months and toss 500/month towards your debts (I know this may be a lot beyond your current expenses), but it'll be nothing but goodness for getting a car financed.

I hate to say it, but I'd look hard at my finances before trying to get a car with what you posted, but if you need a car, you need a car. Hard to keep a job without one these days.

Re: Will I approve for a new auto loan?

deedub626 — Tue, 10 Apr 2012 17:42:30 GMT

Not really sure how much time I have. I only have about 1500 laying around

One Main Financial- I had some personal problem in my life and had to pay my way out of a rental contract and rental deposit at a new place.

I just ran a credit report and it showed 696 in experian, and i got the 656 from credit karma. I am not sure if they are accurate.

Do you think it will help if i call my credit card company and ask for an increase on credit line?

Thanks for the reply everyone:)

Re: Will I approve for a new auto loan?

Revelate — Tue, 10 Apr 2012 18:01:24 GMT

deedub626 wrote:
Not really sure how much time I have. I only have about 1500 laying around

One Main Financial- I had some personal problem in my life and had to pay my way out of a rental contract and rental deposit at a new place.

I just ran a credit report and it showed 696 in experian, and i got the 656 from credit karma. I am not sure if they are accurate.

Do you think it will help if i call my credit card company and ask for an increase on credit line?

Thanks for the reply everyone:)

The Credit Karma score is unfortunately near worthless, and there's a 99% likelihood that any Experian-provided score you have access to is the same. You could be anywhere from 0-50 points off unfortunately in either direction, and that's night and day for getting a loan. The EQ score here is probably the best barometer, but it's not an auto-enhanced score which we just can't get other than applying at a dealership. Have you had a car loan in the past?

In general, yes in this situation it'd help if you got a CLI, but I don't think you're going to get one from what you posted: you're underwater as far as creditors are concerned. Take the time to do a budgeting exercise, see how much money you have as discretionary in a month, and see if you can use that to get your credit card balances paid down. Also you should realistically see what you can afford for payments on the car.

The caveat is, if you need a car suddenly, you're just going to have to roll the dice and see what you get. You can *probably* get financed through TFS (they have a loan product for just about anyone), but if you can wait some time to get your debts paid down some, you'll put yourself in a better position for obtaining the loan at a better interest rate.

Re: Will I approve for a new auto loan?

GrowingCredit — Tue, 10 Apr 2012 18:10:47 GMT

deedub626 wrote:
I been shopping around for a car and hoping you guys can provide some insight.

Credit started on 2006. Current credit score is around 656. It was around 680 before i took on the One Main Financial loan (took out that loan about 2 months ago).

Wellsfargo CC- $2479 of $2600
Citi Bank CC- $1800 of $2000
Citi check plus- $350
One Main Financial loan- $4000

Gross income is 44k

I am looking to buy a new 2012 corolla.

what are my likelihood to getting the loan approve? My payments are always on time and is never late.

With this high utilization there are only two possibilities first outright denial due to maxing out and second approval but with very high interest rate. the chance of former being more than later.

try getting the util down below 10% and than with some down payment you will definately be able to get auto loan. BTW do you have any auto loan history? If no than chance are higher for a double digit APR.

Re: Will I approve for a new auto loan?

deedub626 — Tue, 10 Apr 2012 18:24:36 GMT

Yikes, than perhaps i should wait on the car loan.:smileysad:

I don't have any auto loan history.

Do you think asking my current credit card company for an increase in credit will help?

I forgot to list one of the credit card (since is paid off)- Cap one $0 of $500

Thank you everyone for this very informative information.

Re: Will I approve for a new auto loan?

Revelate — Tue, 10 Apr 2012 18:33:05 GMT

deedub626 wrote:
Yikes, than perhaps i should wait on the car loan.:smileysad:

If you can wait, absolutely do so. Again, I don't think you're going to get a CLI currently, the lender is going to look at the current balances (however you got there, we've probably all been there in the past), and think you're a risky bet. I know it's probably not what you wanted to hear, but much like anything else in life, show the bureaucrats (or in this case, lenders) what they're looking to see... and that's going to take a few months paying down your credit cards.

You can probably be everywhere you want to be in four or so months, you're just not there right now. The other poster was correct, you'd be looking at an ugly interest rate... which can be dealt with if you have to have a new car right now, but if you have the option of waiting, *especially* in your case where you have an easy way to boost your credit score, I'd strongly encourage you to do so.

Re: Will I approve for a new auto loan?

Mike360 — Thu, 12 Apr 2012 02:47:04 GMT

Well TFS most likely will get you in one. I had 3 cards above 80% util and 6k in cc debt and they still were gonna approve me for a corolla s with only $22k/yr income. I did have good credit history and a paid closed auto. They did want 20% down and the apr sucked so I walked and got a beater w/ cash. 660 eq fico at the time.

Re: Will I approve for a new auto loan?

marty56 — Thu, 12 Apr 2012 09:18:43 GMT

If you bank at a local CU, try taking a copy of your CRs to them ask ask if they would approve you based on them. They may not tell you but it least it would save you an INQ and you might know where you stand and what you would need to do tto get approved.

Sadly I would not try this with a dealer unless I really knew them since they would be less interested giving you credit advice and more interested in selling you a car regardless of interest rates or chance of approval.

Re: Will I approve for a new auto loan?

brandoncraig — Thu, 12 Apr 2012 17:16:08 GMT

You should definitely wait if you can and pay down the cards with high balances. I can tell you from experience that this will make a world of difference in your score and therefore your interest rate. I was in the same situation a year ago and I applied for an auto loan with high utilization on my cards. I got a rate of 20%+. Over the course of a year I paid my cards down and now I have a rate of 5.19%.

Re: Will I approve for a new auto loan?

deedub626 — Thu, 12 Apr 2012 17:21:10 GMT

Thank you everyone for all these wonderful answers and advice!!!

let's just say i have $4000 dollars.

Would it make a difference which one i pay off first? Credit card or the loan? How does the creditor see this?

Re: Will I approve for a new auto loan?

HoldingOntoHope — Thu, 12 Apr 2012 18:18:17 GMT

Paying down or paying off the credit cards will be the best. FICO scores installment loans as a much smaller part of the equation and paying it down or off will have little impact on scoring. Just pay the installment payments on time. If you have extra money you could add it to the installment payment just to reduce your overall outlay on interest.

And don't forget to hold something back as the auto dealer will probably require a down payment. The more down payment available for the car will help overcome other credit weaknesses.