Car Loans, low credit score

[Anonymous]

Hi, I am new to myFICO and am very sorry if any of this is redundant or easily accessible elsewhere, but I am in need of advice.

I suffered an injury that left me out of work for a little over a month in 2012 and fell into a gap that left me with no short term disability, etc. Due to this payments were late and subsequently my credit score dropped and my report suffered. In 2013 I also had a mishap with a short period of low income and thus, my score and report further suffered.

Currently I work two jobs as a registered nurse, I am in school (9 credits), and I rodeo. I have been slowly rebuilding my credit and have recently enlisted the help of Lexington Law, which was useful to me in the past, but am thinking I should cancel this account due to things I have read on this forum.

My delema is this: I am in need of a pickup and horse trailer. I orderd a horse trailer with 5% down that will be here in April. However, I recently unexpectedly had to move and am now in a Contract to Deed on my home, which is a great scenerio for me currently. When I ordered the trailer I was expecting my score to increase substantially between then and April when I will need the financing, and that can still happen. Except now that I am looking for a pickup (only wanting to spend $20,000) a dealer pulled my credit several times, which I should have expected, but niavely thought he would only pull it once, and this has dropped my score again. He also states I need a cosigner. RoadLoan approved me for $19,800-25,000 with anywhere from 13%-16% depending on the option I choose and with many stipulations. I would really not like to use RoadLoans if I can help it.

So, I need a pickup and trailer by April, I make enough money, but my score/report are bad.... what should I do?

Debt to Income ratio of about 22%

One and only credit card at 0-1% utilization

According to Credit Karma

Pre Dealer pulling my scores

TransUnion: 622

Equifax: 597

Experian.com: 600

Post Dealer pulling my report (credit Karma):

TransUnion: 619

Equifax: 586

According to my CapitalOne credit tracker:

TransUnion: 625

MyFICO:

EQ: 599

TU: 636

EX: 600

Also, I have applied with WellsFargo (who I bank with) and DCU for an auto loan of $20,000. I realize these hard inquiries are hurting my score further, but I'm not sure what else to do besides shop around and try to get approval. I am willing to pay a higher interest rate and refinance later when my score improves, which it will. It's just frustrating to be working two jobs and feel like I'm doing everything I can to right my wrongs and still be turned down....

Advice?

[DeadlyPersona]

Capital One Auto Finance.....I've been told they are pretty good approving auto loans to people with low credit scores.

[DueDilligence]

As Far as approvals with a credit score that low, I would like to concur with the Gentleman above that Capital One will most likely approve you! If I were you I would get a secured card through them due to the fact they will most likely send you a preapproval offer in the mail for an auto loan.

[DueDilligence]

The only unfortunate thing is that you missed most of the President's Day sales.

[mtrsprt]

Sell the horse and trailer.  Get yourself in a better financial state, before borrowing more money IMO.

[Anonymous]

That isn't an option.

Really my financial state is fine, it is my past financial mistakes that are the issue. The only debt I have is student loans, the trailer when it gets here, and my current auto loan, which will be traded and the dealerships have already offered the full amount owed for that vehicle....

[StartingOver10]

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@Anonymous wrote:

That isn't an option.

Really my financial state is fine, it is my past financial mistakes that are the issue. The only debt I have is student loans, the trailer when it gets here, and my current auto loan, which will be traded and the dealerships have already offered the full amount owed for that vehicle....

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anne, please do some research on the value of your current vehicle. You say that the dealership has offered the full amount owed, is the vehicle worth more than you owe on it?

You do know the dealership plays games with the value of your purchase and your trade in value by giving you "full amount you owe" on the trade in and then increasing the purchase price of the value of the vehicle you are purchasing?

You are subject to more games from the dealership because your credit score is low. Have you checked your auto enhanced scores yet here on this site? Check here to see what they are because many dealerships use the auto enhanced scores to determine your credit worthyness. http://www.myfico.com/Products/FICO-Score-3-Report-View/   If you know your auto enhanced scores you can negotiate a bit better. But really the best thing is to step back and remove the derogs from your CRAs where possible.

One more thing: dump Lexington Law. You can do much better than Lex Law can do. Go to the rebuilding forum and get some help there so when you decide you can get this new vehicle, you are in better shape for the long term.  Some people have increased their scores tremendously in just a few months.

[Anonymous]

Thank you for the advice.

Yes, I have KBB my existing vehicle and the trade in offers are reasonable.

I checked my auto enhanced scores last night. I didn't even know those existed until visitig these forums. Now I have a better handle on that. Those scores are lower than I thought. M car loan was one that was late (30 days) when I was short on funds.

Also, I am canceling my LL today.

I have been trying I get the late payments off of my report with GW letters for a few months now and will continue to do so on my own again. I paid off my only credit card this January and have not used that one for 2 years. It is with Capital One and I'm hoping (even though I've read they're one of the worst) to get those late payments removed.

Thanks again for the advice, I will continue to research here on the forums and continue to do what I can to get the derogatory marks removed.

[Anonymous]

I will give a better picture of my financial state:
Before tax income:
Full time job: $3000/month
PRN job: around $800/month

Student loans: $30,000 ($70.88 and $75/month)
Credit card (capitol one):$6 balance, $2000 credit limit
Mortgage: $373/month (balance $29,900)
Current auto: $487/month at 8% (balance $7000)

My full time job is at a rural hospital and I recently had the opportunity to apply to have 65% of my existing loans paid down over the next 2 years for a commitment to work, which I will take advantage of. Because I this I am not worried so much about paying down my student loans aggressively and thus have maintained my low payments on those. If I did not have that opportunity I would increase those payments drastically.

[CH-7-Mission-Accomplished]

I agree about getting a quote from Cap 1 Auto Finance.  It won't hurt your score if done within 14 days of the other inquiries.

Although the Road Loans offer isn't good, it's also not 24% or 28% which they sometimes give out.

I think you are unlikely to get an offer from DCU or Wells (consumer division) with your scores right now.

I would make a few more inquiries and if you are set on making this purchase go ahead with Road Loans, put as much down as possible (some cash too if you can) and then double up on payments for a year, clean up your credit and refinance with DCU or another credit union.

As the other person posted, they can play games with your purchase price.  You need to know what the actual value of this car is and do not get into a loan for more than that amount!  If you start out $5000 upside down because you overpaid, you are not going to be able to refinance out of that high interest rate loan.

This is also a good reason to divorce your financing from your auto purchase.  Once you get into a dealer's finance office, it's all smoke and mirrors and you won't know what has happened to you.  If you have your financing lined up (like with Cap 1) you can focus on negotating the price with the deaer which makes the most sense.