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New Member
zodearest
Posts: 2
Registered: ‎03-07-2013

College Student With No Credit with Auto Loan Questions

Good afternoon everyone,

 

I have been a full time college student for the last 2 years, and have 1 last semester this fall to go before getting my degree. As of late I have been making enough money monthly to afford getting my first vehicle. I submitted a loan application to a credit union for $5,000 and had my mom co-sign on the application for me because I have no credit and without a co-signer I'd be unable to obtain a loan. Her credit isn't the best and she told them before anything else that that was the case, they reassured the both of us that it wouldn't be too difficult as they just the day before accepted loan applications for many people with foreclosed homes and even repoed cars. They told me they'd call me today and they did only to tell me that the application was denied. I asked them why and they said due to duragatory marks on my mom's credit.

 

This has me worried now because I really do need to obtain a loan from a bank, but do not want to come off as looking credit hungry. I do have the funs monthly to afford a payment with excess cash, but can't hand someone $5,000 all at once for a vehicle that will last me a couple years. The credit union then told me that there would be inquires on my credit, and as I did research it would appear that they would be hard inquiries which can do damage to my credit. Is this going to hinder my chance of approval with any future auto loan applications, or should I not be too worried. I don't want to damage my credit and really want to start establishing credit and maintain a good credit.

Established Contributor
SamsungHDTV
Posts: 517
Registered: ‎10-25-2011

Re: College Student With No Credit with Auto Loan Questions


zodearest wrote:

Good afternoon everyone,

 

I have been a full time college student for the last 2 years, and have 1 last semester this fall to go before getting my degree. As of late I have been making enough money monthly to afford getting my first vehicle. I submitted a loan application to a credit union for $5,000 and had my mom co-sign on the application for me because I have no credit and without a co-signer I'd be unable to obtain a loan. Her credit isn't the best and she told them before anything else that that was the case, they reassured the both of us that it wouldn't be too difficult as they just the day before accepted loan applications for many people with foreclosed homes and even repoed cars. They told me they'd call me today and they did only to tell me that the application was denied. I asked them why and they said due to duragatory marks on my mom's credit.

 

This has me worried now because I really do need to obtain a loan from a bank, but do not want to come off as looking credit hungry. I do have the funs monthly to afford a payment with excess cash, but can't hand someone $5,000 all at once for a vehicle that will last me a couple years. The credit union then told me that there would be inquires on my credit, and as I did research it would appear that they would be hard inquiries which can do damage to my credit. Is this going to hinder my chance of approval with any future auto loan applications, or should I not be too worried. I don't want to damage my credit and really want to start establishing credit and maintain a good credit.


Welcome to the forums! Sorry someone hasn't responded to your questoin yet. The auto loans section isn't as active as the other threads. But to answer your question, if you apply at different banks all in a short time frame it will count as 1 hard inquiry. 

 

For example: you apply at BANK A and they hard pull your credit, they decide to approve you or not. You then apply at BANK B the next day. They will ignore your hard pull from BANK A because its so close, they know that you are loan shopping. 

 

Source: http://www.myfico.com/CreditEducation/CreditInquiries.aspx

 

 

I'm a personal banker and do a lot of auto loans serving the Houston area.
I suggest first time car buyers to read the sticky guide in the auto loan section.
I try to check these forums often, but if I missed your post, please feel free to message me with a link to it.
New Member
zodearest
Posts: 2
Registered: ‎03-07-2013

Re: College Student With No Credit with Auto Loan Questions

[ Edited ]

Thank you for the response. I can rest a little easier now and not be so worried about doing a loan application elsewhere.

 

However I have one more question.

 

The credit union I applied at told me I could reapply with my dad as the co-signer this time (his credit score to my knowledge is worlds better), and he agreed to do so. My dad has told me that his credit score is around the 650 range. Will this be good enough for me to get approved for a $5,000 auto loan with him as the co-signer? I don't want to put my dad through all the hassle, or ding his credit in the process.

 

Thanks again for all the help!

Established Contributor
SamsungHDTV
Posts: 517
Registered: ‎10-25-2011

Re: College Student With No Credit with Auto Loan Questions


zodearest wrote:

Thank you for the response. I can rest a little easier now and not be so worried about doing a loan application elsewhere.

 

However I have one more question.

 

The credit union I applied at told me I could reapply with my dad as the co-signer this time (his credit score to my knowledge is worlds better), and he agreed to do so. My dad has told me that his credit score is around the 650 range. Will this be good enough for me to get approved for a $5,000 auto loan with him as the co-signer? I don't want to put my dad through all the hassle, or ding his credit in the process.

 

Thanks again for all the help!


If they based it only on his credit score, i'd say yes it would be good enough. I bought a car a few weeks ago with a 650 credit score and was approved for $25,700. But you have to consider all other factors like his DTI, utilization, and things like that. So YMMV.

I'm a personal banker and do a lot of auto loans serving the Houston area.
I suggest first time car buyers to read the sticky guide in the auto loan section.
I try to check these forums often, but if I missed your post, please feel free to message me with a link to it.

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

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