Reply
Valued Member
sherakay
Posts: 59
Registered: ‎02-20-2012
0

Denied for auto loan with 666 myfico score?

I applied with my hometown credit union in Seattle that I've been with since 1997 for $16,000 on 02/14. They denied me because of my score (pulled from TU) collections and late payments. The late payments are from 2005 when I went through a called off engagement and lots of money was lost in deposits and purchases for the wedding and we were co-habitating and I got stuck with all of the bills. It was a 30 day late on like 2 separate cards. They also said that since I live in LA and they are in Seattle, it's like an unsecured loan so I should apply somewhere locally.

 

Also, the last month on the rental lease didn't get paid 11/06 and went to collections. Rent was for $900, they added fees which took it to $1445 and now with interest it's up to $2206. I just filed a dispute with TU and EQ. There was also a $105 collections from Time Warner that I forgot all about from 5/07 that I just sent a Pay for Deletion letter to on Friday.

 

So on 02/16 I applied with American Airlines Credit Union and simultaneously opened an account with them. They denied me too!

 

Since the statute of limitations was up on these collectionsand I paid off all other legit old debts (before knowing about Pay for Deletion letters) and they were gonna fall off 11/13 and 5/14 respectively I wasn't concerned about them and had been focusing on paying down the almost $5000 I have on CC's. I have a debt use ratio of about 60% that I'm working on getting down to 30%. 

 

My question is, with the 'negatives' on my credit report being 5 years old and my score being 666, I'm seeing so many others on the forum getting approved with lower credit scores. Is it notoriously harder to get approved from outside sourcing such as credit unions and better to go to the dealership? Do I need to wait until both collections have dropped off, or the pay for deletions work, or they at least say PAID for me to get approved even though my credit score is considered fair?


Starting Score: Walmart myfico 664 TU Lender Pull 690 EQ Lender Pull 669
Current Score: Walmart myfico 698 TU Equifax- 686 Experian- 692 Transunion- 700 Lender Pull 7/18/12
Goal Score: 720


Take the FICO Fitness Challenge
Regular Contributor
To-Be-Continued
Posts: 197
Registered: ‎06-08-2011
0

Re: Denied for auto loan with 666 myfico score?

This is where a lot of people get it wrong. Banks don't just look at your score when applying for a loan. They look at your balances lates and collections and if the collections were in the last two years or  1 year for lates you are not going to get  a good APR or as you found out easily approved for financing.

 

Im sure you can get a loan but at what APR 20%?

 

TBC

AUDE VIDE TACE :
Starting Score: 684
Current Scores: EQ 796 TU 794 EX 750 (All lender pulls on 2/9/12)
Goal Score: 800 all 3
Community Leader
Senior Contributor
StartingOver10
Posts: 4,203
Registered: ‎03-06-2010
0

Re: Denied for auto loan with 666 myfico score?

As pointed out above, your credit request includes more than your score.

 

How much are you putting down on the vehicle?

What is your income and how much are you planning to spend on your new vehicle?

 

CU's have guidelines on the DTI. If you are showing 60% utility on your cc's and a history of late pays, then they will require more down to issue the loan. Were the CU's specific with their denial? Did they just mention the credit score, or did they mention other factors?

 

Also, remember, each CU has its own guidelines so you can be turned down by one or two and accepted by another. But the key here is to first find out what triggered the denial. Usually you can fix the issue by increasing your down payment. The most risky borrower, from a lender's POV, is the one that has no skin in the deal.

Moderator
Revelate
Posts: 9,486
Registered: ‎12-30-2011
0

Re: Denied for auto loan with 666 myfico score?

[ Edited ]

sherakay wrote:

 

My question is, with the 'negatives' on my credit report being 5 years old and my score being 666, I'm seeing so many others on the forum getting approved with lower credit scores. Is it notoriously harder to get approved from outside sourcing such as credit unions and better to go to the dealership? Do I need to wait until both collections have dropped off, or the pay for deletions work, or they at least say PAID for me to get approved even though my credit score is considered fair?


It can be.  Dealers have an interest in actually selling you a vehicle (for a lot of reasons), and they can work with the lenders they have relationships with to leverage that

 

In addition to everything else others posted, a CU doesn't have that relationship, and doesn't necessarily care (they have a relationship with you, but if you've only been with them for one day...) they will determine if they're better off lending that money out to someone else, for something else.

 

If you need a car in short order, I almost always would suggest just walking down to the dealer, usually they will be able to find financing for you at some APR, and if it's higher than what it could be, just refinance it in six months or a year and go from there.  You don't have to live with the APR the dealership gives you (assuming you get a loan with no pre-payment penalty which I highly recommend).

 

Beyond that, to reiterate what StartingOver stated: a downpayment is your, and your lender's, absolute best friend when it comes to financing any vehicle.  It's statistical fact: the more money of your own you put in, the less likely it is you're going to flake on the car loan.  A downpayment may not get you complete atonement for your credit past, but it sure buys a ton of forgiveness (my car loan is case in point with my scores and my report).

 

 

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)


Take the myFICO Fitness Challenge
Frequent Contributor
currentlywinning
Posts: 485
Registered: ‎01-14-2012
0

Re: Denied for auto loan with 666 myfico score?


To-Be-Continued wrote:

This is where a lot of people get it wrong. Banks don't just look at your score when applying for a loan. They look at your balances lates and collections and if the collections were in the last two years or  1 year for lates you are not going to get  a good APR or as you found out easily approved for financing.

 

Im sure you can get a loan but at what APR 20%?

 

TBC


What of a collection is within the two years, but its been paid? Is that still bad news for the borrower?

Just keep swimming...just keep swimming...just keep swimming, swimming, swimming....
Regular Contributor
To-Be-Continued
Posts: 197
Registered: ‎06-08-2011
0

Re: Denied for auto loan with 666 myfico score?


currentlywinning wrote:

To-Be-Continued wrote:

This is where a lot of people get it wrong. Banks don't just look at your score when applying for a loan. They look at your balances lates and collections and if the collections were in the last two years or  1 year for lates you are not going to get  a good APR or as you found out easily approved for financing.

 

Im sure you can get a loan but at what APR 20%?

 

TBC


What of a collection is within the two years, but its been paid? Is that still bad news for the borrower?


I was told by a LO that if you have collections make sure that they are older than two years paid or not. Actually I was also told not to pay the collection because it would update and renew the status date and put me in the under two year window.

 

TBC

AUDE VIDE TACE :
Starting Score: 684
Current Scores: EQ 796 TU 794 EX 750 (All lender pulls on 2/9/12)
Goal Score: 800 all 3
Frequent Contributor
currentlywinning
Posts: 485
Registered: ‎01-14-2012
0

Re: Denied for auto loan with 666 myfico score?

BUMMER!

 

I actually paid the collection back in November 2011, so I hope that the effect of it becoming "newer" has died down a little bit...

 

I have been trying to get these people to delete it, but we've just been going back and forth...I WILL wear them down eventually, just dont know that it will be before I go for the car loan.

Just keep swimming...just keep swimming...just keep swimming, swimming, swimming....
Moderator Emeritus
MarineVietVet
Posts: 14,153
Registered: ‎07-14-2009
0

Re: Denied for auto loan with 666 myfico score?


To-Be-Continued wrote:
 

I was told by a LO that if you have collections make sure that they are older than two years paid or not. Actually I was also told not to pay the collection because it would update and renew the status date and put me in the under two year window.

 

TBC


This LO was mistaken. Collections are scored off the Date of Assignment and nothing else. I say that with the disclaimer that this is how it's supposed to work if the coding is done correctly. That can be a very big if at times.

Regular Contributor
To-Be-Continued
Posts: 197
Registered: ‎06-08-2011
0

Re: Denied for auto loan with 666 myfico score?


MarineVietVet wrote:

To-Be-Continued wrote:
 

I was told by a LO that if you have collections make sure that they are older than two years paid or not. Actually I was also told not to pay the collection because it would update and renew the status date and put me in the under two year window.

 

TBC


This LO was mistaken. Collections are scored off the Date of Assignment and nothing else. I say that with the disclaimer that this is how it's supposed to work if the coding is done correctly. That can be a very big if at times.



I think it was more of an underwriting point of view. In other words she was not afraid of it affecting my score but how the underwriter may see it as recent.

 

Thankfully I don't have to worry about that lil gem anymore.

 

 

TBC

AUDE VIDE TACE :
Starting Score: 684
Current Scores: EQ 796 TU 794 EX 750 (All lender pulls on 2/9/12)
Goal Score: 800 all 3
Moderator Emeritus
MarineVietVet
Posts: 14,153
Registered: ‎07-14-2009
0

Re: Denied for auto loan with 666 myfico score?


To-Be-Continued wrote:
 


I think it was more of an underwriting point of view. In other words she was not afraid of it affecting my score but how the underwriter may see it as recent.

 

Thankfully I don't have to worry about that lil gem anymore.

 

 

TBC



The UW's seem to march to the beat of a very different drummer at times don't they??  :smileyhappy:


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.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}