Capital One declined auto loan refinance. 700/770 scores, $26k/$60k income

[jhtrico1850]

I have a friend that could only get a Santander 20% loan over 6 months ago. He's never been late on anything, has a 727 Equifax CreditKarma score.

My actual FICO is 804, and his was 671 when he was at 30% over utilization and 70% utilization on 1 card (those are down to 5% per CreditKarma). We'll find out in a week if his FICO is as high as his CreditKarma, as soon as Capital One sends the rejection letter.

Overall credit profile is 1 credit card over 2 years $2k limit, 1 credit card over 10 months $2700 limit, 1 auto loan over 6 months. The Equifax has like 40 inquiries due to the car dealer. Overall, I guess a "thin" file, but perfect payment history.

A couple of weeks ago, we tried to refinance with Bank of America, where he has had over 2 years with them as a checking/credit card customer, but they declined when his fico was 671 and mine was 804 due to "insufficient credit history". He tried a month before to apply without a cosigner and got the same thing. I'm sure people with limited credit have had success getting refinances, but not him so far.

I sent Ask Capital One a Twitter direct message, hopefully that helps, so we don't have to wait 7-10 days to find out why. I've also heard of the EO executive office, but I've heard more success regarding credit limit increases rather than auto loan approval. I guess I can approach that venue if Twitter isn't succesful.

I've read on the boards and have seen lots of people with decent scores oddly declined by Capital One, but never DCU, I guess I can look at them next, but just feel jaded so far.

[StartingOver10]

You know, it isn't always the borrowers criteria that the bank doesn't approve.  Sometimes the lender (Cap One and all the others) changes their portfolio requirements and the borrower doesn't fit those requirements. Tell your friend not to take it personally.

His/her best bet is a CU anyway. They have overall better rates if their portfolio is seeking auto loan borrowers. Some CUs aren't in the market, so call first (or email or check the website) to see what the rates and terms are in general first.

[Creditaddict]

the loan is currently only in his name?

why are you trying to co-sign?

he needs to join DCU or another small local credit union not big banks.

[jhtrico1850]

I'm trying to cosign so he can get better rates/chance of approval. He also tried Georgia's Own Credit Union by himself early January, with no success. Initially approved for 7%, which was awesome compared to 20%, then they said LTV was too high, and they needed $2600. So we got the $2600, then they said they couldn't do it.

Their reasoning was because he is a part of the DACA (deferred action for childhood arrivals) program. He has a legitimate ssn (that says work authorization only), driver's license (that says temporary), but they didn't want to take on the risk. Even Republican Marco Rubio has admitted that he doesn't want to deport people that are already enrolled in the program, and for all intents and purposes, they will eventually become permanent residents, if not citizens.

BB&T has a page sort of explaining/supporting DACA. If the Twitter reachout doesn't work out, we might just apply in person here.

http://www.bbt.com/bbtdotcom/about/cra/daca.page

The Bank of America app did ask for residency status, so I wonder if that was a reason.

I don't think they can just check residency based on the auto loan application? That's a reason we're hesitant about DCU, since I hear they're very invasive and ask for copies of everything.

[Creditaddict]

BBT will need a 680. I have a friend that works for them.

[jhtrico1850]

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@Creditaddict wrote:

BBT will need a 680. I have a friend that works for them.

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That's good to know  Do you know if they have any other requirements, like "length of credit history", "too many inquiries", LTV, debt-to-income, etc., or is it mostly score based? I've heard Capital One doesn't like a lot of inquires for some reason.

I think Capital One pulls all 3 bureaus, and maybe we applied to early, as only Equifax showed the new utilization on CreditKarma. Transunion didn't have all of the crazy inquiries, so it was 712 and we thought that was good enough maybe we should have waited for everything to report.

[jhtrico1850]

Finally got the rejection letter. It said "assets are insufficient for amount of credit requested". No FICO was given, and they said our credit was not considered, just the assets, whatever that is (income? car loan? car?).

[EddieK]

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@jhtrico1850 wrote:

Finally got the rejection letter. It said "assets are insufficient for amount of credit requested". No FICO was given, and they said our credit was not considered, just the assets, whatever that is (income? car loan? car?).

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Sounds like the requested loan amount is larger than the appraised value of the car.  You could try to see what their LTV policy is and then make a lump sum payment to your current loan(if possible) and then try for the loan at a lower amount.

[jhtrico1850]

I got so excited that reaching out to them on Twitter/Executive Office for a reconsideration, but nothing came of it. The Twitter guy told me to mail them a letter and that they can't do a manual review, or tell me what kind of down payment I would have needed.

Next thing to try I guess is go to like BB&T with a down payment in hand. No problems with a down payment, but just seems absurd to give Santander $2.5k with no guarantee. Would prefer to give it to BB&T in exchange for lower rates.

[Anonymous]

Fyi whenever there is a cosigner they use the lower credit score to underwrite the loan. This is why I'm baffled that lenders require cosigners. Sounds like the problem is amount of loan requested, or not enough income to justify the amount requested.