Auto Loans

[tofukiller]

I have $2500.00 to put down and my equifax says I'm a 649. I have recently within the past 2 years paid off some bad accounts with collections. I only have 2 small one on my report (under 1,200 together) and one I have paid off today. I make almost $40,000/year. I have one credit card and I only use 15% of it.

What do you think?

[Cellice]

Get your utilization below 9% so your score can improve. This will allow your score to go up slightly which will help you get approved for a higher rate.

Do you have any negatives auto history wise? Late payments? Repo? That is what will affect your score.

[p-]

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Cellice wrote:

Get your utilization below 9% so your score can improve. This will allow your score to go up slightly which will help you get approved for a higher rate.

Do you have any negatives auto history wise? Late payments? Repo? That is what will affect your score.

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^
Good advice.  

Take a hard look at your report and see if there are any other opportunities for improvement.  With not much credit history and so little down, it would be smart if you picked up something used but in good condition.  At 40k a year, a lower payment will give you breathing room in case things get tight.

Most importantly, become a member of a credit union and talk to them about auto financing first.  Don't make any deals at a car dealer unless you know what your own CU can offer.

Good luck! 

[Autumnslight]

Honestly, if there's a vehicle that you want that you could afford the payments on, I'd at least try for new instead of used. You may very well qualify for a much better interest rate on a new vehicle than on a used one, even with a lower score.

I just bought two new vehicles at the beginning of July with a 648 Equifax, and a few negatives (a couple late payments on credit cards, and two small collections) on my credit report. My auto history was very good, with 4 previous auto loans, and just one 30 day late ever. I found that I qualified for the top tier promotional financing through the dealer (1.9% for 72 months or 0% for 60 months at Volkswagen, in my case). Had I bought used, I would have been looking at a rate much higher, probably 5-8% at least.

[Lynnst]

I just purchased a new Toyota and was told a FICO score above 650 qualified for the 0% financing they were offering on one of the models.  Also, the auto enhanced scores the dealer pulled were significantly higher than my regular FICO score (the auto enhanced EQ score was 39 points higher.)  So, if you have any (good) auto buying history that should help you.  Good luck.