I was denied at the CU and dealership yesterday for a 30k car loan. reason for denial: limited credit history. They suggest I get cosigner with a 700 or better credit score. debt to income ratio under 20%. Credit utilization under 2% at time of denial. Income around ~30k. Even though i have generally have low credit limits, wouldn't I seem like a much more prime borrower since I have extra income available that can sustain a car note? I feel its unfair that my 4 year credit history overshadows the fact that I have a PERFECT payment history, not one blemish on my credit reports other than a few inquires on TU.
FICO's as of 9/1 are
TU EQ EX
~686 717 (Due to EQ not updating yet to show 2% util ) 737(Lender pulled)
My next next ace in my sleeve was to use an online lender such as Blue Monkey, UP2DRIVE, and myautoloan. But with a denial because limited credit lingering over my head, I feel my chances of being approved slim to none. What infuriates me about all this is the fact that I have been doing the right thing since my first opened account, took the time to learn the importance of having a good credit score/report,(thanks to this site BTW) and how to maintain and keep my score/report in great condition. That alone should make me that much more of a prime borrower since I know what could possibly happen to my borrowing future if I start slipping up now. But I guess I don't get any credit for that.
Capital one had been sending me pre-approved letters every since I got my credit card with them. Yesterday I finally decided to go to the dealership they had listed on the letter. I got approved but at an astounding 20.7% rate.
As bad as I wanted that Chevrolet Silverado I said no thanks and got the heck up out of there!
Cass, while you do show perfect payment history, the dealership might be concerned about the fact that have no evidence of handling a high limit revolving card or installment loan. This is particularly true if the ONLY reason they cited on your denial was limited credit history.
With 4 years of perfect payment history and 2% utilization, I'm curious why your scores aren't higher. I would expect to see scores higher than 740. Have you opened any accounts in the last year? Inquiries in the last year? Too many accounts with balances?
I recently checked my FICOs from TU and EQ. I'm also at a 4 year history and was at TU 741 and EQ 737. I had seven accounts reporting with a balance so I'm sure I lost some points there. I also had credit pulled from a car dealership, which pegged me at an auto-FICO of TU 744 and EX 782. That was enough to qualify me for 0% financing.
How much of a down-payment are you looking to put down? Perhaps that would help ease the car dealership's concerns a bit.
MSRP for my car is $38475
After negotiation, my price came down to $34378 with an out the door price of $36500 inc tax, title, etc. with a 10% down payment I was looking at an $33000 balance.
1 cc opened this year with a limit of 1k
5 inqs on TU
1 inqs on EQ
2 inqs on EX
Tu and EQ have not updated yet to show the 2% util yet.
What kind of car?
Cass, any chance you might be able to qualify through a college grad program?
No, I do not qualify.
The dealer told me if I come with a cosigner with auto loan history, I will get approved. My father comes to mind, but he has a few recent lates and collections keeping him from the 700's. Even if I was able to get all of his negatives removed, I don't see myself being able to have them removed within the next couple of weeks.