Auto Loan Do I Qualify?

[MrsCHX]

Please post in a new thread:

Credit Score: FICO 8 (via Credit Check Total): Experian 623 / TU 610 / Equifax 575 (Why so different?!). Merrick's free tracker says it's backed by TU and shows 609. Capital One Credit Tracker also says backed by TU but shows 562

AAoA: 9.9 years per CCT

# of positive trade lines: 22 (mostly student loans but now have 3 major cards and 2 store cards)

# of negative trade lines: 5 (2 judments 8/2010 and 06/2011, 1 collection, 2 charge-offs). I have 5 inquiries each on Exp and TU, 3 on EQ

Income: $58,000

Length of Employment: 1 year (prior job 3 years)

Previous Loan Experience: Last auto loan reposessed May 2008 (no longer shows on any CR)

Debt-to-Income (DTI): 28%

Year of Car: 2015 or 2016 if possible. Otherwise 2012-2014

Miles: under 20K

Purchase/Refinance: Purchase

Requested loan term (XX Months): 60-72 depending

Down payment amount: None if possible (current car is on the fritz...if I can hold off 3-4 months, I can have $1500 down)

Co-borrower/Co-Signer: NOT an option

Other: I don't understand why my Equifax is so different from Experian and Trans Union. I'm hoping that won't hold me back. I have 2 CO credit cards and am hoping to run through their Auto Navigator to see if I'm prequalified.

(edited title and to add to 'other')

[Anonymous]

If CO doesn't approve you with no money down. Can pretty much say no other bank would.

[MrsCHX]

Cap One prequal said no 

Will garden and cross my fingers that I can stay with my current car and try again in 6 months.

(is 6 months enough time?)

[Anonymous]

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@MrsCHX wrote:

Cap One prequal said no 

Will garden and cross my fingers that I can stay with my current car and try again in 6 months.

(is 6 months enough time?)

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Maybe not. Think they don't like your DTI. I had a lower score than you when I was approved. My score was in the 500 when they approved me for a max amount of 35000 with interest 7%-22%. During time of approval I only had 1 secured card with CO with a CL of 200. Now a year after my rebuild I'm in the 675-695 score with total of close to 40k in CL. But my income is 180k a year. Last year in 2015 I made 240k which 60k of it was a year end bonus. Think you just need to pay down some of those cards. Get CO credit card if you can which you should be able to. Get like the platinum and QUICKSILVER ONE to get ur feet in with capital one

[MrsCHX]

Thanks for the detail.

I just opened both QS and Platinum this month. I'm running all of my (family of 4) grocery purchases through the QS card. I will be paying down a chunk of my Merrick card soon (it's at 85% utilization) and in April I'll have a decrease in rent and an increase in income. So hopefully with the new TLs and paying down that Merrick and lowering my DTI...I can be successful in July/August when I apply.

[Anonymous]

The answer to do you qualify is almost always yes, the real question is terms. You won't likely get preapproved by any lenders with your scores and DTI ratio because most subprime situations require some dealer participation.  My suggestion would be to get your utilizations down to under 20% for a few months. Work on putting together some cash for a down and join a credit union.  A relationship with a good credit union can really pay off, so many people overlook them and end up paying higher APR as a result.  If you can get into Navy Federal I would highly suggest them, if not or in addtion I would join DCU.  If push comes to shove you can do a deal at the dealership knowing the APR will be lousy and the refinance once your scores have improved.  Doing that has some risk because you need to make sure you buy smart and can in fact refinance within an few months of doing the deal.  If you can get your current car to last another year you will likely be able to get a solid finance deal so it may be worth living with what you have. Do you know what your auto scores are?  The are different than regular FICO and are what the lenders will look at.

[Anonymous]

Also, I would not apply for any additional credit cards or loans until you get your car.  Adding additional lines of credit during the previous 12 months can be a negative for lenders. 

[MrsCHX]

Thanks guys.

Though I have another question. Do I include my rent and utilities inDTI? Because I included it in my post...

Anyhow, no way my car will last another year. Especially not through another winter. The heat doesn't work well and it needs exhaust work done. This past fall I already replaced the water pump, power steering pump, alternator and battery. It is dying. Quickly.

I've had my Merrick card since October and it's pretty high utilization right now - 78%. All the other cards listed were apped for last month. Like I said, I'm using my Cap One QS card and making payments on my charges every 4-5 days. Amazon right now is at 50% utilization.

Overall utilization then is somewhere around 40-45%. 

I did an app spree over 2 weeks in February (maybe 7 inq total??) and am gardening now. There really aren't any other cards I want so no need to risk HP to app for them. I'd like to see these balances grow!!! 

I'm scheduled for my Merrick card CL to double in May. And both the CO plat and QS are on steps; so July would be my 5th month for both of those. 

I'm getting a pay increase May 1 as well. 

I'll apply to NFCU and DCU and am really hoping to be able to get a car in July, August at the latest.

[Anonymous]

Utilities won't factor into dti but rent will, that is why when you apply for any credit they ask you what your rent is (doesn't show up on a credit report like a mortgage does). I neglected mu credit for years after a foreclosure because I thought I would never have decent credit again. When I went to buy a car 2 years ago I was embarrassed that at my age and income I had to get a subprime loan so I spent a lot of time here and learned a great deal. I have gained over 100 points in each score since . My point is that work your scores by learning here and being disciplined and it will pay off. Even if you have to take a subprime deal this summer if you continue to work and you buy smart you can refi to something much better after 5-7 months. I would suggest that when you go to buy you do all the research to buy smart, by smart I mean making sure the loan to value ratio is as close to 100-110 percent as possible. I would suggest not getting an extended warranty or other add ons because that will put you more upside down and frankly dealers and warranty companies make a ton of money providing warranties on cars that are incredibly reliable. When you have a tight budget the instinct is to get coverage because you cannot afford a repair if the car breaks down. The problem with that the odds are very high that you won't use the warranty and instead you will pay interest on a warranty that puts you more in the hole. I suggest buying something with a factory warranty intact , once the car makes it past the first year or so the odds are you will be fine till well after 100k. If you want to buy used than certitied pre oned (by the factory not an independent ) is a good way to go. I know you didn't ask for this level of advice but I see folks load up on warranties all the time and they get terrible amounts of debt as a result and are upside down on the loan for years. I saw a couple here the other day that bought a new car that has a 100,000 factory warranty and they still bought an extended warranty. They financed 26k on a car with a 18500 Msrp. They will be upside down until the last year or so of the loan.

[MrsCHX]

Oh no, I appreciate the level of detail! Especially when I look back at prior auto loans and how uninformed I was. I'm sure I had no clue what the heck I was doing before and like you say, I am here to become educated and informed about debt and credit.

I am waiting impatiently to see my scores later this month because I got 2 negs removed and am sending out 2 PFD letters on 2 collection accounts. Fingers crossed.