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A complex question about auto loan and its influence to my credit score

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Dustink
Valued Contributor

Re: A complex question about auto loan and its influence to my credit score


@Eduardo wrote:

And what about dealership finance services for a new car like 0 apr fpr 36 months? What level of credit score should I have to be approved for it? I have a job but employment history for the current employer is about 2 months only (


When I was given 0%.

 

I had several credit cards with decent limits. Low utilization and about 18 months of history. Additionally, I put down at least 20% plus TT&L. That was borderline for approval. The only reason they pulled through was because I had a low rate, 60 month, no money down approval with USAA.

 

You will be looking at high rates with such limited history.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


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Message 11 of 13
HoldingOntoHope
Valued Contributor

Re: A complex question about auto loan and its influence to my credit score

You are highly unlikely to qualify for any dealers lowest interest offer. And if you seriously are going to try and get out of the car in a year or less then a new car is the LAST thing you want to consider. The depreciation on driving it off the lot can easily hit 20%. As we suggested earlier you want to look at a vehicle that is probably 2-4 years old with relatively low mileage (figure no more than 15,000 miles for each year old). You should be able to find financing through the dealership with a down payment. Even if the interest rate is a bit high just consider the plus of credit building. Then if you end up keeping it longer than a year you will be in position to refinance it with a much stronger credit profile to back you up.

Best financial advice I ever got: "Just imagine what an adult would do and do that."

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Message 12 of 13
OptimalFICO
Valued Member

Re: A complex question about auto loan and its influence to my credit score

Be careful about letting an auto dealer shop for a loan for you. There are stories of people getting hit with several hard inquires that are not coded properly as an auto loan so they end up counting as separate inquiries (typically all auto inquiries within a certain period of time are counted as one inquiry if the purpose is coded as an auto loan).

 

Best to get financing in advance of going to the dealer, like through a credit union, if possible.

 

Regardless, be very careful about shopping on Craig's List for a car, there is a lot of fraud. I bought my car on CL and it was a stressful experience. But I did end up getting a great car at a great deal. And I think they even have vehicle escrow brokers now. Just be careful.

Message 13 of 13
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