DCU and PenFed - wasting my time?

[speckled]

I've been doing some research on applying for my first auto loan. I'll be applying with Cap1 Auto Navigator and a few local CU's. I know DCU and PenFed a are highly recommended by posters here, and am considering applying with them as well. However, I'm concerned that I don't have a chance at being approved and don't want to take the hit to my score if I don't have a shot.

Any thoughts on my chances with DCU and PenFed?
Fico8
Eq 633
TU 634
Ex 605

Fico Auto 5, 4, and 2
Eq 678
TU 688
Ex 618

I have a medical collection for $196 that is paid in full and has been removed from EQ and Ex. Also a released state tax lien that only remains on Eq. Hoping those two will be removed soon, but need to start applying, like, yesterday.

I have an open CC collection from 2016 for $1200. A collection for a utility bill open for $400. 3 or 4 old charge offs that have been pain in full.

Income is $40k. CC (I only have one with a $500 limit, will be looking to add to that soon) util is at 8%. No mortgage or other auto loans, so DTI is very low.

Another thing I'm concerned about is my employment history working against me. I'm a licensed professional and have been working in my field for 4 years, under the same license, no employment gaps. However, with completing an internship, (1 year) then working for the same employer for 2 years, then moving to another just 4 months ago... I'm afraid that looks bad. Can I say that I've been at my job for 4 years? I've technically been doing the same job for 4 years, but have only been with my current employer for 4 months. Would it be disingenuous to say 4 years?

Thanks in advance for your advice!

[DaveInAZ]

When they ask for your employer they mean the company that issues your paycheck, so you should be honest and say 4 months. But 4 months isn't that bad, and you can explain your 4 years in the profession.

I belong to both Penfed & DCU, car loan with DCU & Home Equity with Penfed. I would guess no with Penfed, possibly with DCU.

The good thing about Cap1 is they will give you and approval or decline and quote you an interest rate with a soft pull on your credit report, they only hard pull when you do the deal with them. So I would start with Cap 1 and see what they say.

With your income & DTI a car dealer will certainly find a lender for you. The problem is car dealers shop your application around to lenders and you can end up with 5-10 hard pull inquiries on your credit report. If you don't think you will apply for any other new credit in at least six months after you get a car loan then they won't be that bad a problem. With those collections and credit scores expect to pay 10-15% interest on a car loan. Make perfect payments for a year and clean up those collections and you'll be able to refinance at a much lower rate.

Good luck.

[whocares]

Don't even bother applying with open collections to PenFed (I can't speak to DCU).  Even though PenFed uses FICO9, open collections are still penalized in your score and it triggers a manual review.  I was denied for open collections and even denied after paying the collections (my FICO9 according to PenFed was 705).  PenFed is known to be very conservative and I can attest to that as my higher income/low DTI (<8%) wasn't enough to overcome my baddies even with an OK FICO9 score.  

[speckled]

I applied yesterday and preqal with Cap One for up to $31k, 3.7%-10.3% APR. The few cars I'm interested in are between 4.5% and 7.5%.
With my baddies, I'm doubting DCU can beat that, but I might try. As pp suggested, I'll hold off on PenFed.

[Anonymous]

Congrats, just like previous poster stated after one year of payments, consider refi with local CU or Cap One.  

[speckled]

Updating again to say I was also approved with DCU! Up to 100% of the value and 5.99%. Was hoping to be approved for 84 months (and refi in a year or so) but only got 72. Wonder if they would reconsider the term?

[DaveInAZ]

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@speckled wrote:
Updating again to say I was also approved with DCU! Up to 100% of the value and 5.99%. Was hoping to be approved for 84 months (and refi in a year or so) but only got 72. Wonder if they would reconsider the term?

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Congratulations! Is that 5.99% with the 1/2 point discount with "relationship status" - checking with direct deposit & e-statements?

You can ask them for the longer term. When I got my refi for a 2016 used car in Oct. 2017 they initially offered 60 months and I got them to go 65 months.

[speckled]

Thank you! That is before the 1/2 point discount. If I wind up going with DCU over Cap One, I will definitely open an account to get that rate reduction. Thinking of applying to a local CU to see if they can do any better before we go shopping.

It's nice to see my rebuilding work paying off. This time last year I was denied for financing for a $4k beater!

[bandeapart]

Congrats, speckled!  One fair word of warning with DCU....well, actually two warnings: 1) we applied and were approved for up to 110% financing last fall (we were planning to put 10% down, but that's neither here nor there).  When it came time to finalize the deal, the CSR on the phone mentioned as an afterthought, "Oh, and remember that you have to have an 80/20 LTV."  When I pushed back and referenced my original discussion with them, he said that someone must have given me misinformation.  Great.  We luckily had the cash for the full 20% down payment but I was still steamed.  2) if you live in a state that doesn't require the original title to go to the leinholder, be VERY fast about sending DCU a copy of the title as soon as you receive it.  I live in MO and it takes a full month to get the title, and here, the vehicle owner retains possession of the title.  I got multiple nastygrams from DCU starting even before I received the title, and then had to fight with them to keep it in hand.  I finally found someone reasonable to speak with, who asked that I just scan and email a copy of the title to them.  If you don't, they bump your interest rate up to 18%

Good luck!
L