First Time Buyer Woes

[cabarkeep]

Hate to tell you this but Ford is one of the most lenient when it comes to first time buyers and they offer 5.9% for 60 mos for all that qualify! 

I do not know what state you are in but I would be curious as to what the Dealer told the bank ...I am assuming you have no other "baddies" on your credit?

The banks hate maxed out credit cards too with first time buyers ...not good ....Ford does not really care about multiple other lines of credit cards if the length of time is still very little....they look for length of time at work ...income to debt ratio ...(car pmt cannot be more than 18% of gross pay) and Down payment always helps

I personally would have reconned the whole scenario with a Ford Manager to see what they put on your application as far as income and length of time at work.

If there were any derogs then that is the reason for the decline ...Ford usually only allows up to about 250 bucks in derog credit and sometimes not even that

No one will be able to give you advice unless we know everything that is on the credit report as far as any derog etc .... everything else sounds good though .... good luck

[cabarkeep]

Oh I forgot to mention ... the reason why you got turned down at CAP One is not because of credit or lack of it etc .. it is because they do not have a first time buyers program

Just fyi ... First time buyers the last time I heard were statistically the worst buyer even ahead of people who have had repos go figure

Same with Credit Unions .. you better do your homework before applying as most do not offer first time buyer programs ....what state are you in?

[Anonymous]

Okay,

So I went ahead and pulled my scores and report for you guys. I have absolutely NO baddies (lates or collections) on my report. The only things that are harming my score are lack of history (2 years and 6 months for my only credit card), two few accounts (it's a conspiracy) and a high balance that I paid off on Sunday that will be reflected on my score on Feb 3rd when my statement cuts. The only recent inquiries are from my shopping around for an auto loan.

My scores are:

TransUnion: 673

Equifax: 681

Experian: 703

What can you advise me?

[Anonymous]

I'm in FL by the way!

[cabarkeep]

sounds like you fit Fords First Time Buyer program as long as they counted your job length over 6 mos ...a year is better but you shouldnt have had any problems getting into a focus.

I would personally contact Ford Credit or go to another dealer and try again ...especially since you have paid down your credit card

doesnt sound like you would have any probems getting done as a first time buyer with proof of income and at least 6 mos on the job (some credit unions ask for a year on the job) ...

See what you can do .. if you were in CA we would have you in a car .... good luck

[Anonymous]

I've been emplyed at my school for over four years BUT I've only started full time employment with them since October (3 months). I think that's what kicked me in the butt. I'm going to keep building my credit scores. I guess I'll just reapply in May when my 6 months full time kicks in. Thanks guys! Wish I was in Cali!

[Anonymous]

elixandrea,

It is great that you have paid off your credit card; however, since you want to build your credit, you, believe it or not, need to use your credit card. My recommendation would be pay your monthly bills with your CC and pay off the CC each month (where possible, set these transactions up as automatic to eliminate the possiblity of being late on payments and to avoid using your CC for anything but your normal monthly expenses). That way you are showing activity on your CC but also showing you can handle the debt. I have been doing this for the past couple of years and now my FICO scores are great.

Equifax 794 
TransUnion 797 
Experian 809

[Anonymous]

In life you must "Read the Signs!"  Being turned down by Capital One could be called a blessing!

[Anonymous]

Elixandrea

The people who suggested that you go to a Credit Union are 100% Correct.  If you don't belong to one, do your home work and find one that you can join. (Most Credit Unions I know are very helpful in this matter...they will refer you to the correct place)

When you find your credit union, you need to go talk with them.  Find out these two very important pieces of information.  1)  APR they will charge you on a car loan and 2)  The Term (number of months) of the loan.

You said you wanted to pay $215.00/mo.  You can forget about a new car.  The most you could possibly finance and keep a reasonable loan term (60  months or less) is in the $8,000 - 11,000 range.  That means after subtracting your Tax Title and etc, the cost of your vehicle should be $7,000 - $8,500 range.  All of this is dependent on your Credit Union and the APR and Term that they quote.

You say you are just out of college.  Congrats by the way!  I am sure you know Excel, if not find someone who does.  There are two functions you need to learn:  1) PV and 2) PMT.  To find how much you can finance use the PV function.  Your input will be Monthly Payment, APR & Term.  (that is Amount Financed, not the cost of your car...subtract 10% - 20% for the cost of the car.  The next is PMT.  you need to know the Amount Financed, APR & Term.  Play with those...Good luck!  Lew 

[Anonymous]

Hi elixandrea,

Why don't you save up some money (over the next few months) and just buy a car from a private party? I would recommend looking on craigslist.org (look for your city/state). That way you'll have no crazy APR. Then you can work on building up your credit and saving money to purchase a new car in a couple years. You can find cheap older cars, which may just need a quick tune up and new tires. I purchased a 1997 car from an ad on the site for $500 (it was originally listed for $999). I had it tuned up, put new tires on it and drove it across the country. I've been driving it for a whole year and it's still kicking. I've had no problems with it. Just be sure if you go that route, you get a mechanic to look at the car before you buy it, to make sure it won't be more of a headache than trying to get an auto loan.

Hope that helps!