Chances of getting Car Loan?

Anonymous · ‎04-06-2015

Greetings,

I am on a rental car for the next 30-40 days. After - i will need to purchase a car loan. I am 29 years old and i have had 1 prior car loan that i did not need a co-signer for. Last year i was not financially smart and having my car die on me and needing a new one - really caught me by surprise and now i am in a bad position.

I need advice on how i should tackle this the best way possible to give me the best chance at getting a car loan early of next month.

My financial situation is as follow:

- I have had no late payments on any accounts

- My Experian score is 692 , Equifax 701 , TransUnion 696

- I have 9 credit cards and my current debt on these combined is $20,433.19 out of $27,450. This gives me a ratio of 74% which i know is very bad.

Here are the card balances and limits -

* Bank of America - Card 1 = 5700/6000 -- 95% used

* Chase - Card 1 = 5633/5800 -- 97% used

* Chase - Card 2 = 1150/4200 -- 27% used

* Chase - Card 3 = 1205/3500 -- 34% used

* Bank of America Card 2 = 2967/3000 -- 99% used

* Capital 1 - Card 1 - 1976/2000 -- 99% used

* Capital 1 - Card 2 -1212/1250 -- 97% used

* Capital 1 - Card 3 - 587/1000 -- 59% used

* Kohls - 0/700 used -- 0% used

Here's the thing... out of this $20.4k of debt - i can pay off roughly $10,000 of it in the next 40 days. What do you all think the best way would be to use that 10k to pay off half of this debt? I was thinking 1 of 3 different ways.

1 - Pay off as many cards as possible - and have balances left only on the top 2 cards that i have a 5800 and 6000 limit on

2 - Pay half of the balance on all of those cards

3 - Pay off all the cards except the first four - which i could bring those 4 down to 70%, 69%, 27% , 34% utilization each

** In the end this would bring my current utilization down from 74% to 39%. for my credit cards

** I have 3 defered student loans totaling $10,488

** I also have 8 "credit inquiries" on my experian report, but only 3 on my equifax and 4 on my transunion report.

whats my odds of getting approved for a car loan do you all think? I make $41,000 a year plus a 1,000 year end bonus. Do you think my credit score will jump above 700 for Experian afterwards? Im also wondering if i should be getting a 2nd job in the mean time... im so afraid i will get denied for a car loan next month , even if i pay off half that debt

thanks in advance!

EddieK · ‎04-06-2015

@Anonymous wrote:
Greetings,

I am on a rental car for the next 30-40 days. After - i will need to purchase a car loan. I am 29 years old and i have had 1 prior car loan that i did not need a co-signer for. Last year i was not financially smart and having my car die on me and needing a new one - really caught me by surprise and now i am in a bad position.

I need advice on how i should tackle this the best way possible to give me the best chance at getting a car loan early of next month.

My financial situation is as follow:
- I have had no late payments on any accounts
- My Experian score is 692 , Equifax 701 , TransUnion 696
- I have 9 credit cards and my current debt on these combined is $20,433.19 out of $27,450. This gives me a ratio of 74% which i know is very bad.

Here are the card balances and limits -
* Bank of America - Card 1 = 5700/6000 -- 95% used
* Chase - Card 1 = 5633/5800 -- 97% used
* Chase - Card 2 = 1150/4200 -- 27% used PAY
* Chase - Card 3 = 1205/3500 -- 34% used PAY
* Bank of America Card 2 = 2967/3000 -- 99% used PAY
* Capital 1 - Card 1 - 1976/2000 -- 99% used PAY
* Capital 1 - Card 2 -1212/1250 -- 97% used PAY
* Capital 1 - Card 3 - 587/1000 -- 59% used PAY
* Kohls - 0/700 used -- 0% used

Here's the thing... out of this $20.4k of debt - i can pay off roughly $10,000 of it in the next 40 days. What do you all think the best way would be to use that 10k to pay off half of this debt? I was thinking 1 of 3 different ways.

1 - Pay off as many cards as possible - and have balances left only on the top 2 cards that i have a 5800 and 6000 limit on
2 - Pay half of the balance on all of those cards
3 - Pay off all the cards except the first four - which i could bring those 4 down to 70%, 69%, 27% , 34% utilization each

** In the end this would bring my current utilization down from 74% to 39%. for my credit cards
** I have 3 defered student loans totaling $10,488
** I also have 8 "credit inquiries" on my experian report, but only 3 on my equifax and 4 on my transunion report.

whats my odds of getting approved for a car loan do you all think? I make $41,000 a year plus a 1,000 year end bonus. Do you think my credit score will jump above 700 for Experian afterwards? Im also wondering if i should be getting a 2nd job in the mean time... im so afraid i will get denied for a car loan next month , even if i pay off half that debt

thanks in advance!

I'd pay the above highlighted debts first. Depending on how long you've carried those high balances on your BOA and Chase1 cards, you may be balance chased. Which could be a possibility with paying off the other cards too, but I'd rather have as many of those debts at 0. So you're utilization will be ~37% vs 74%, which will definitely get you a bump. That will put you in a lot better position to be approved. I'd say your chances would be very good.

Starting Scores:
1/19/14:
1/28/14:
2/12/14:
Current Scores:
7/10/19:
12/17/16:
9/05/17:

Anonymous · ‎04-06-2015

@Anonymous wrote:
Greetings,

I am on a rental car for the next 30-40 days. After - i will need to purchase a car loan. I am 29 years old and i have had 1 prior car loan that i did not need a co-signer for. Last year i was not financially smart and having my car die on me and needing a new one - really caught me by surprise and now i am in a bad position.

I need advice on how i should tackle this the best way possible to give me the best chance at getting a car loan early of next month.

My financial situation is as follow:
- I have had no late payments on any accounts
- My Experian score is 692 , Equifax 701 , TransUnion 696
- I have 9 credit cards and my current debt on these combined is $20,433.19 out of $27,450. This gives me a ratio of 74% which i know is very bad.

Here are the card balances and limits -
* Bank of America - Card 1 = 5700/6000 -- 95% used
* Chase - Card 1 = 5633/5800 -- 97% used
* Chase - Card 2 = 1150/4200 -- 27% used
* Chase - Card 3 = 1205/3500 -- 34% used
* Bank of America Card 2 = 2967/3000 -- 99% used
* Capital 1 - Card 1 - 1976/2000 -- 99% used
* Capital 1 - Card 2 -1212/1250 -- 97% used
* Capital 1 - Card 3 - 587/1000 -- 59% used
* Kohls - 0/700 used -- 0% used

Here's the thing... out of this $20.4k of debt - i can pay off roughly $10,000 of it in the next 40 days. What do you all think the best way would be to use that 10k to pay off half of this debt? I was thinking 1 of 3 different ways.

1 - Pay off as many cards as possible - and have balances left only on the top 2 cards that i have a 5800 and 6000 limit on
2 - Pay half of the balance on all of those cards
3 - Pay off all the cards except the first four - which i could bring those 4 down to 70%, 69%, 27% , 34% utilization each

** In the end this would bring my current utilization down from 74% to 39%. for my credit cards
** I have 3 defered student loans totaling $10,488
** I also have 8 "credit inquiries" on my experian report, but only 3 on my equifax and 4 on my transunion report.

whats my odds of getting approved for a car loan do you all think? I make $41,000 a year plus a 1,000 year end bonus. Do you think my credit score will jump above 700 for Experian afterwards? Im also wondering if i should be getting a 2nd job in the mean time... im so afraid i will get denied for a car loan next month , even if i pay off half that debt

thanks in advance!

jim44 · ‎04-07-2015

@EddieK wrote:

I'd pay the above highlighted debts first. Depending on how long you've carried those high balances on your BOA and Chase1 cards, you may be balance chased. Which could be a possibility with paying off the other cards too, but I'd rather have as many of those debts at 0. So you're utilization will be ~37% vs 74%, which will definitely get you a bump. That will put you in a lot better position to be approved. I'd say your chances would be very good.

+1. Other factors to consider are your monthly expenses, the price of the car you want to buy and of course a down payment. Are you considering trading your dead car in? You do have a decent CS, however making $41K a year even with 39% utilization on your revolving debt might make it a bit tight for you. The best of luck with your car purchase.

Anonymous · ‎04-07-2015

Eddie K -- Thank you for your reply! Yeah i think i might go with this plan - pay off as many cards as possible. I should be able to get it down to roughly 5,000 on my hightest Chase credit limit card, and 5000 on my highest Bank of America credit limit card.. this would leave me with 2 credit cards with a Utilization rate on each around 85%.

I read somewhere else on the forums that by doing this method - the person would get a bump in their credit score 2 ways.

1 - My overall Utilization would decrease (74% to 36-37%).

2 - Having less credit cards reporting balances.

Jim44 -- Thank you for your reply as well! I dont have any other monthly expenses really besides my car insurance thats paid off and gas for this rental car. Since i live at home although i pay rent - its only 200 to my parents for now, which i am paid for the next few months I would like to purchase a car around 20k to 25k.... although i wouldnt have extra cash for a downpayment - i could charge a downpayment for the car on 1 of my credit cards :/ Right now its looking like i can get my utilization down from 74% to 36-37% which is a bit difference.. but i do wonder how the dealership would view that tho because its still 2 problem areas technically

Anonymous · ‎04-19-2015

Scottscott? can you ask your parents for $$$$. would they lend you?Does your parents have good credit? I m thinking balance transfer instead of spending that $10k on paying down debt.

You say you have $10k to pay off credit cards? dont do that? cash is king. so$20-25k car huh? so you have income with low low expenses and savings of $10000 which amounts to nearly half of your car purchase.

Have you considered Pre-Owned from 2012-2014 between $15k & $20k.

In your OP your scores seems like not the problem? have you even bothered to apply with your given scores any place ever? whats 1 hard inquiry? in around when you are ready to buy? dont go apply now just whenever you are ready. First get a feel with one inquiry what is it looking like to you given where you are now?

dont be afraid of rejection. be smart in knowing where you stand the best chance of getting an auto loan.