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Frequent Contributor
andyaycw
Posts: 290
Registered: ‎07-25-2007

Re: Denied... FICO's are all over 680 No negatives

nes makes an excellent point - I didn't think of it before since you mentioned your DTI was low - but if your monthly payments on this 33k loan exceeds a certain percentage of your monthly gross income, that might be a red flag to the dealer. I can't say for certain what exact percentage would raise that red flag, though I would say anything over 20% may be a problem. Through the Mazda college grad program, one of the criteria for approval is that monthly payments may not exceed 15% of monthly gross income.

 

On a $33,000 loan at a 0% interest rate for 60 months, I calculated the monthly payments to be about $551 per month. An income of 30k/year translates to about $2500 gross income per month. So you can see that the car payment already eats up more than 20% of your take-home pay. Keep in mind that I'm also assuming you get the best interest rate at 0% and a long term of 5 years. Your monthly payments could very well increase much more depending on what credit tier you qualify for.

 

If you could come in with a larger down-payment that would drastically reduce your monthly payments, that might help ease the dealership's worries. Try giving this hypothetical to the dealership and see what they say  - I find it hard to believe now that they would deny you based on just your short 4-year credit history. 


Starting Score: EQ 773, TU 766
Current Score: EX 794, EQ 787, TU 776
Goal Score: 800


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Cass_at_myF1CO
Posts: 52
Registered: ‎05-12-2010

Re: Denied... FICO's are all over 680 No negatives

Denied with co signer... CO signer 652 TU LO pulled 3 recent collections totaling under 4k( I am already on it!!!) 50k car loan with <25k balance left. Perfect payment history on car loan and all other accounts. 5 year credit history Me 706 TU Combined income: 120k Will only finance 20k. What ticks me off is that I got approved for a 20k USED car loan several months back

StartingScore:b>TU 587 EQ 627 5/14/10
Current Score: TU 686 EQ 733
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Established Member
nes
Posts: 23
Registered: ‎02-12-2009

Re: Denied... FICO's are all over 680 No negatives

Just a suggestion, I know lenders feel as though first time buyers have to crawl before they walk, and walk before they run. Maybe you should consider a less expensive car, finance 10-15k, and a year or 2 from now, trade it off for that mustang gt.
starting score in feb 2008
Eq:630
Tu:630

current score as of aug 3 2010
eq:692
tu: 697

Established Member
AdAstra
Posts: 11
Registered: ‎06-18-2009

Re: Denied... FICO's are all over 680 No negatives

Are you trying to use Ford Motor Credit?

 

Regardless, you don't make enough to buy a $30k car. I think $20k loan for someone with your salary is very generous. There are a lot of pretty nice cars you can get (used) for $20k.  

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Cass_at_myF1CO
Posts: 52
Registered: ‎05-12-2010

Re: Denied... FICO's are all over 680 No negatives

While I do not make enogh at the moment to get approved, why is it that with a co signer that makes close to 100k I still get denied? With a combined income of 120ish/yearly income wouldn't that be enough to secure the deal? I have the scores, he has the income, debt to income good, so ....

StartingScore:b>TU 587 EQ 627 5/14/10
Current Score: TU 686 EQ 733
Goal Score: TU 720 EQ 720 EX 720 1/1/11
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Mega Contributor
Creditaddict
Posts: 18,820
Registered: ‎10-23-2007

Re: Denied... FICO's are all over 680 No negatives

Creditors want to see at least 12-24 months of clean history usually.  Recent baddies are a sure sign that something is wrong especially if they have the income they say

Fico Scores: EQ 639 Navy, TU 665 GE, EX 677 Prosper (07-09-14)
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Tazman81
Posts: 711
Registered: ‎06-23-2010

Re: Denied... FICO's are all over 680 No negatives


nes wrote:
Your income is holding you back some id imagine, no lender wants to loan you more then you make in a year. A 33000 car loan is easily a 600+ payment, plus insurance and gas will put you over 1k a month, if you make 30k a yr(2500 a month) I can see why they would be reluctant to lend the money, esp if you have auto credit...

+1 --- I agree your income is also holding you back somewhat, but I think the biggest thing is that you need "auto loan" history as well.  Do you have any student loans that are currently in repayment?  Or  would you be willing to get a cheaper vehicle for about 6 months and then go get the car that you want?  Do you have a CarMax in your area?  I've always liked dealing with them.  Was this a new or a used vehicle?  I don't recall if you can apply for credit directly on Ford's website.


Starting Score: Eq: 662 Tu: 532 (03/02/2011) CH7BK 01/12/2009 Discharge
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New Contributor
Cass_at_myF1CO
Posts: 52
Registered: ‎05-12-2010

Re: Denied... FICO's are all over 680 No negatives

No student loans I would take a cheaper car for 6 months if: No money down 5% interest or lower I don't have to roll any negative equity into the new car Only car that comes to mind that I would take for 6 months is a ford fiesta

StartingScore:b>TU 587 EQ 627 5/14/10
Current Score: TU 686 EQ 733
Goal Score: TU 720 EQ 720 EX 720 1/1/11
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Valued Contributor
chasmith
Posts: 1,062
Registered: ‎05-26-2010

Re: Denied... FICO's are all over 680 No negatives

If you make a minimal downpayment on a new car and plan to get out in six months you're guaranteeing yourself negative equity.  Have you thought about looking at a certified used car?  I just financed one through Ford Credit on good terms considering my credit scores and recent BK.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
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Frequent Contributor
andyaycw
Posts: 290
Registered: ‎07-25-2007

Re: Denied... FICO's are all over 680 No negatives


Cass_at_myF1CO wrote:
While I do not make enogh at the moment to get approved, why is it that with a co signer that makes close to 100k I still get denied? With a combined income of 120ish/yearly income wouldn't that be enough to secure the deal? I have the scores, he has the income, debt to income good, so ....
You don't qualify because they are probably using the lower FICO scores of the two applicants. If one applicant has an 800 FICO but no income, they won't qualify for a loan because while they demonstrate they are willing to pay back the loan, they have no means of repaying it without income. If the other applicant has a 500 FICO but makes a a six-figure income, it is still a tough sell to the lender because this applicant has demonstrated a low willingness to repay debts.

Starting Score: EQ 773, TU 766
Current Score: EX 794, EQ 787, TU 776
Goal Score: 800


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