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Frequent Contributor
Posts: 440
Registered: ‎08-08-2007
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Auto Loan Approval with Open Tax Lien on Reports??

I may need to purchase a car soon. My scores are all over 660 though a few months ago a tax lien was placed and it now appears on all 3 credit reports.

 

Other than the lien, my payment history is perfect and the scores are still decent. Do lenders approve loans when there's an open lien on credit reports? If so, who may be the best to go through?

 

Any help is greatly appreciated.

 

Thanks!

Rust never sleeps and neither does my fico score...
New Contributor
Posts: 67
Registered: ‎12-11-2008
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Re: Auto Loan Approval with Open Tax Lien on Reports??

I was in that situation although I had paid the liens. Unfortunately they are still showing as current so getting a loan was tough. It is possible, your interest rates will just be high. If you can get the lien paid off and listed as paid on your credit report you'll be in better shape.

 

Also, be prepared to bring in documentation that the lien is satisfied.

Frequent Contributor
Posts: 440
Registered: ‎08-08-2007
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Re: Auto Loan Approval with Open Tax Lien on Reports??

That's what I thought. The lien won't be satisfied when I go to purchase, but hopefully based on everything else that's positive on my reports, I'll get a loan (though with a higher interest rate).

 

2 questions:

 

When you say high interest rate, roughly what rate do you think?

Would Prime lenders approve with the higher rate, or will I be relegated to sub-prime?

 

Thanks

Rust never sleeps and neither does my fico score...
New Contributor
Posts: 67
Registered: ‎12-11-2008
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Re: Auto Loan Approval with Open Tax Lien on Reports??

I know at 610 auto enchanced fico I became subprime. Its hard to guess since you don't know your auto enhanced score. I'd say be prepared to spend some time looking for a loan and a car. Getting the right loan will be quite important to you so take the time to get it right. I spent about 2 weeks on it and I'm satisfied I got the best deal I qualified for today. All things considered its still not a great deal so I'll either refi or trade in asap. I'm thinking 6 - 12 months, depending on a couple of factors.
Senior Contributor
Posts: 3,240
Registered: ‎04-03-2008
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Re: Auto Loan Approval with Open Tax Lien on Reports??


ficonovice wrote:

I may need to purchase a car soon. My scores are all over 660 though a few months ago a tax lien was placed and it now appears on all 3 credit reports.

 !


 

Why do you think you may need to purchase a car soon?  In the current economy when cash is king it might be wise to think deeply about how to avoid purchasing a car.  Remember a car purchase is a difficult decision to undo, so it reduces financial flexibility: if you spend a lot on eating out and circumstances change you can cut that back right away, but with a car purchase you risk being stuck.

 

TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
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Frequent Contributor
Posts: 440
Registered: ‎08-08-2007
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Re: Auto Loan Approval with Open Tax Lien on Reports??

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Why do you think you may need to purchase a car soon?  In the current economy when cash is king it might be wise to think deeply about how to avoid purchasing a car

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Understood, but sometimes one must finance the purchase of goods and services to be practical. I have a long commute to work and public transportation isn't an option, nor is buying a cheap car outright, though if I can and do buy a car, it won't be a new expensive one.

 

I appreciate your words of caution, but if I do choose to purchase a used car, with an open lien what are my realistic best options. Any lenders that are more flexible but still considered somewhat prime?

Rust never sleeps and neither does my fico score...
Frequent Contributor
Posts: 395
Registered: ‎04-25-2008
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Re: Auto Loan Approval with Open Tax Lien on Reports??

I have an open (unpaid) tax lien- however, it is 6 yrs old, so is not dinging my fico quite as much as a new lien- though it is still impacting it.

Cap 1 has sent me many preapprovals + from talking w/them, it seems like they would be willing to finance me w/an open tax lien.  Interest rate is not fabulous- roughly 7-10% from what I’ve seen- but it’s not as atrocious as say roadloans.  Supposedly Wachovia is tax lien friendly, but they were recently bought by wells fargo (Which is NOT tax lien friendly), so that may have changed.  I’ve seen people get approved by chase w/open tax liens.  car dealers here (calif) advertise 'will work w/bk + tax liens,' so financing's not totally impossible...but it's not a walk in the park either.

While now is not ideal to buy a car, sometimes you NEED 1.  Ex., my car is 12 yrs old + needs a transmission.  Cost of trans= more than car is worth.  Public transit- not a viable option where I live.  Commute= not within bicycling or walking distance. 

I plan on buying a used car w/a nice down payment (ex., 3-4k down on say a 15k loan).  From talking w/finance depts, it seems like if you put more down, it helps minimize the impact of the tax lien.

Valued Contributor
Posts: 1,797
Registered: ‎04-27-2014
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Re: Auto Loan Approval with Open Tax Lien on Reports??


creditreformer wrote:

I have an open (unpaid) tax lien- however, it is 6 yrs old, so is not dinging my fico quite as much as a new lien- though it is still impacting it.

Cap 1 has sent me many preapprovals + from talking w/them, it seems like they would be willing to finance me w/an open tax lien.


ahhh there is hope, TY

 

i went car shopping last year and dealer said the only way was with a larger down payment and high interest (made it a bad deal and i didnt even know i had the lien at the time). i quit then and am still in the same truck (my lien is NOT paid in full). i hope it all works out for you OP. you cant make any $$$ if you can't get to work.

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Valued Contributor
Posts: 1,797
Registered: ‎04-27-2014
0

Re: Auto Loan Approval with Open Tax Lien on Reports??

oh yeah, the dealer pulled 666 at the time of the deal.

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