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Frequent Contributor
songsofexperience
Posts: 270
Registered: ‎03-05-2008
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Denied Denied Denied - Fico Auto Enhanced 633?!

I've been thinking about getting a new(er) car but I haven't had a car loan in some time. The car I have now (an 2003 Matrix) I paid cash for so my last auto loan was with Capital One in Dec 2006. It was for $11,500 over 48 months and I paid it off in September of 2009 (so 33 months). I was never late on a payment.

Since then I've gone through a divorce, resulting in a foreclosure. Needless to say, my credit is dinged. When I got married I had no debt except for student loans and when I got divorced I had 15K in CC debt and a morgage heading for foreclosure. My credit score tanked from 800 to where it is now, about 613 (moral here?).

 

So . . . I applied with Capital One. Denied.

I applied with Chase as they are my bank. Denied

Even RoadLoans denied me! BUT, RoadLoans supplied the rejection letter right away. It says my credit score is 633 (EX). I pulled TU 613 and EQ 619 yesterday, but it also says that the reason I did not score "well compared with other applicants" because:


1. Insufficient auto trade experience

2. No recently discharged bankruptcy

 

I don't understand either of these. I've never declared bankruptcy so why would I have a recently discharged bk and why would this be favorable to have? Also, I had a car loan for 3 years that was paid in 2009 so how is that insufficent auto trade experience?

 

The other reasons they provide I DO understand:

1. Serious delinquency and public record or collection filed (stupid hospital bill that went to collections and a coupe of CO)

2. Proportion of balances to Loan amounts is high

 

So I totally get that I'm seen as risky because of the charge offs, collections, and foreclosure but I've seen other people post on the approval thread getting approved with even lower FICO scores (but maybe they don't have the CO and Collections??!).

 

I can trade in my current car (maybe 3-4K) and have a dp of $2-3K. Is it worth going to a dealer to see what they can do? I'm thinking of buying another Toyota.

 

Obviously, the real answer is keep driving my 03 Matrix for another year or two, pay off what I have left on my credit cards (only about 3-4K so close to what I'd use as a downpayment!), and see what happens. Thing is, I know the CO/collections won't go away and I've read that paying them won't make a difference in my score except maybe it's better to see "settled" or "paid" than leave it as is?

 

I guess I've answered my own question, which is to rebuild my credit and then get another car, but I really didn't think with a FICO of 633 (apparently) that I'd be denied. I have a decent paying job (I have a Ph.D. and work for a non-profit) and recently moved in with my parents to look after them (my mom died a couple of months after I moved several states to be with them and my dad has Alzheimers so I'm here for a while!) so have no rent/utilities etc. My dad survives on Social Security though and has no retirement savings. My thought was that since I have no housing expenses currently I should pay off the debt and then look at car loans.

 

Stil a bit puzzled regarding RoadLoans. I mean, Santander is the European king of subprime lending!

 

I'm now sort of curious to see what the dealer could get me (if anything, which seems doubtful). How embarassing would it be to go in and get denied face to face?

 

 

 


Starting Score: 2/2013 EQ 535
Current Score My Fico: 8/2014 EQ 654| EX 661 | TU 660
Lender Pull 11/4/14: EQ 679, EX 695, TU 703
Closed on mortgage 11/20/14

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Established Member
DestinyV
Posts: 17
Registered: ‎07-27-2012
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Re: Denied Denied Denied - Fico Auto Enhanced 633?!

I can't answer your questions about you 2 reasons for denial. Those don't make sense to me either, and be it that I'm not an expert I would be guessing. What I can tell you is that I have a repo and charge off and collections on my report. But no high balances on credit cards and I was approved for a brand new car through my local dealership. If you don't have a problem paying high interest rates (mine is ridiculous) you can go to a dealer and see what they can find for you. My advice to you is to pay down your current credit cards keep the balances low and just wait until your score increases. As long as your car doesn't die tomorrow, you'll definitely save more money if you wait.

Starting Score: 555
Current Score: 663
Goal Score: 800


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Revelate
Posts: 9,642
Registered: ‎12-30-2011
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Re: Denied Denied Denied - Fico Auto Enhanced 633?!

Yes try dealer financing if you need a new car; dealer financing can hit options at banks that you can't as an individual: Chase does have a DEEP subprime auto lending group, that I'm not certain is accessible by us mortals directly.  Pretty certain Wells is the same way with Wells Fargo Dealser Services.  Just expect a subprime rate, it may not be pretty, but you can get refinanced down the road so to speak.

 

As for the reasons, I'm betting the first two you posted were the bottom two on the list of 4: those may as well be determined by Oujia board for any lender and can pretty much be safely ignored if so... they really have very little relevance and are only provided because the government says they have to.  If they were the first two on presented denial letter, than I'm as confused as the rest.  

 

I would agree that paying down your debts is the best bet; regardless of what your story is (and yours is better than mine: I was just flat out stupid), it always behooves us to put as much lipstick on the pig before attempting to get the loan.  I *had* to get a loan as I needed a car immediately; in your case if you have a servicable car, you have the luxury of letting some time pass while you clean up your reports.  That's the financially smart solution, and I would say is the overwhelming most favorable choice for you in your situation for everything other than style points.  

 

Regarding the collections and CO's: they won't help your FICO score to be sure; however, there's a lot more that goes into the approval process than just FICO and that's especially true with auto loans.  Paid collections / CO's are OVERWHELMINGLY preferred by underwriters to open ones when it comes to loan approvals.  Everyone makes mistakes, we're human after all, it's what we did after we made the mistakes... and if we got righteous with the creditor, while it's still suboptimal it's an order of magnitude better than unpaid debts.

 

Anyway, I would strongly encourage you to take a look over in the Rebuilding forum to see some strategies for taking care of collections (especially medical ones) and CO's to see if you can pretty up your report for the future.  In this case if you've already taken inquiries for loans, if you really want the car, you might as well wander down to the dealer as the inquiries will all get rolled up into one from a scoring perspective and as such you really aren't losing anything.  Even if you get denied, who cares?  I assure you they've seen worse reports than yours.... a dealer saw mine after all with an absurd tax lien, seriously your issues ain't that bad :smileyhappy:.

 

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Regular Contributor
princechristian
Posts: 203
Registered: ‎07-20-2012
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Re: Denied Denied Denied - Fico Auto Enhanced 633?!

Agree with all above, and also two things that stand out to me is that you've moved recently and that could possibly hurt. And you saying you pay no rent on an application is pointless. They still calculate an estimated rent for any adult attempting to get financing.

Revolvers: FP Gold $300, FP Platinum $300, Applied Bank Business $500, Kay Jewelers $500, Fingerhut $400, Gettington $300

Installers: KHEAA student loan, Dealer Funding LLC auto loan x2, Crescent Bank auto loan, Acceptance Loan Co personal loan x2

Negatives: 1 collection - 2010 $307, Auto lates - 2 30 days, 60 day, 2009 / 3 30 days, 60 day, 2012

Frequent Contributor
songsofexperience
Posts: 270
Registered: ‎03-05-2008
0

Re: Denied Denied Denied - Fico Auto Enhanced 633?!

Ha! So applying for the loan what, 2 days ago (?), has already tanked my EQ score down to 590 (from 613). Didn't take long for that to happen. Yesterday I paid $1300 on a cc to bring that balance down to zero. Wonder how long it'll take that to post and affect my score. I guess I'm going to garden for a while. Thanks for all the helpful comments!


Starting Score: 2/2013 EQ 535
Current Score My Fico: 8/2014 EQ 654| EX 661 | TU 660
Lender Pull 11/4/14: EQ 679, EX 695, TU 703
Closed on mortgage 11/20/14

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Valued Member
turion65x
Posts: 39
Registered: ‎08-21-2012
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Re: Denied Denied Denied - Fico Auto Enhanced 633?!

You should try to but high downpayment so you can standout to the the lender if possible.


Starting Score: 660
Current Score: Gardening Mode! as of 8/25
Goal Score: 725+


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Gardening .....
Frequent Contributor
songsofexperience
Posts: 270
Registered: ‎03-05-2008
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Re: Denied Denied Denied - Fico Auto Enhanced 633?!

Update!

 

I talked to Kia and was told I could be approved for a loan for a NEW car, but not a used because Kia requires a minimum score of 700 to finance a USED car . . . I suppose there's logic to that somehwere.

 

Anyway . . . I did most of the talking back and forth via email and finally went for a test drive and talked with the guy I'd been emailing. He said when they pulled my score (they use TU and EQ) that each was in the 616 range and that they often finance people with much lower scores (he said a guy last week got a car with a score of 508). He'd said the rate would be low but wasn't sure exactly what so when I had him in person, I said, "Look, you've been doing this a while. When Kia says "low" what does it mean?" He said it would be less than 10% since Kia really didn't go over 10% and suspected it would be 8.5. They're calculating it over 72 months.

 

So I'm looking at a 2013 Sorento MSRP $24,065 with $1000 rebate and $750 grad incentive (just finished my Ph.D.). I was planning on $3k down and trade-in, but they only want to give me $1000 for my 03 Matrix so I said I'd rather put $4k down and sell the Matrix on my own.

 

They essentially said there's no room for negotiation on the price, but I plan on asking anyway. Even coming down $1000 would make me happier. Still, I'd be looking at something a little over $300 a month for 72 months. I'd totally plan on paying more each month as I'm very uncomfortable with the thought of a 72 month loan. Since I haven't actually given them the go ahead to process it all I don't have the exact terms but I did see that someone else posted on the auto loan approval thread very recently that they were approved for a loan through Kia Finance forf $17,500 (down payment of $1500)  with a score of 596 or something like that and got an interest rate of 9.39%

 

I'm really struggling with the idea of a brand new car though. It was lovely and has 25 miles on the odometer, but it will lose so much as soon as I drive off the lot AND I own my current car outright so haven't had a car payment in a long time!

 

Do I go for the brand new Kia with the 10/100/5/60 warranty and maybe refinance in a year (if I can find a better rate) OR garden for a while, find myself a used car loan in a few months and go that route? On the one hand, if I can get an 8.5% interest rate it's WAY better than I was expecting and less than I'd pay for a used loan. I think the last loan I had was in 2007 and I had a score of 720+ and it was 10.99%!

 

I've priced Kias, Hyundais, Toyotas etc etc and they're all a very similar price. The Sorento has the best deal with the $1000 rebate and $750 incentive. Even the cheaper sportage is more expensive because it doesn't have the $1000 rebate :smileysad:

 

Thoughts?


Starting Score: 2/2013 EQ 535
Current Score My Fico: 8/2014 EQ 654| EX 661 | TU 660
Lender Pull 11/4/14: EQ 679, EX 695, TU 703
Closed on mortgage 11/20/14

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