Hello guys, I'm looking to replace my trusty old ride after 14 years of service in the near future, probably this Sept. or Oct., so now I'm looking for some tips and eval on my plan - The car is probably going to be around 26 to 27k, and I'm looking to putting somewhere around 10~15k down, leaving 11~17k needing to be financed.
To get the bad parts out of the way, I had settled 3 revolving accounts almost 5 years ago back in July 2008, with 3 30-day late marks associated with those, and another 30 day late on a separate account in June 2008.
Currently my EQ FICO is at 716, have 6 credit cards and 2 department store card/accounts (of which I really only use 3-4), with combined limit of approx. $37k, of which I've been keeping the utilization at or below 5% in addition to paying all charges off every month (I've learned my lessons ). Hard inquiries on file include one from last Sept. for an AMEX card, and one from yesterday when I decided to join PenFed (did not realize they would pull credit just for membership). No mortgage or rent, and also no prior auto loan on history.
On my current situation, I'm 31 years old, I've recently left the military (retroactive to Aug. 30th last year, let's just say the VA and the military aren't the best when it comes to processing paperwork in a timely manner...), decided to go back to school, and got a new job last month that pays about $47k a year, no What do you guys think about my chance at getting approved for a good rate? is there anything I can do to improve my FICO score in the mean time? Any inputs would be greatly appreciated.
edit: holy wall of text, not sure why the formatting got screwed up... fixed :/
Although there are a few challenges in your request for financing I don't believe your FICO score is one of them. If your other two bureaus are the same information then your scores for them should be in the same range. I think your biggest problem is going to be the short employment history. Even in the September / October timeframe you are looking at about 6 months.
If you have a banking relationship with a local bank or any credit union you may want to approach them first in applying for an auto loan. If not I do believe that the substantial down payment you are offering will offset any credit concerns. The dealer will be able to get you financed. If it is not at great terms then you can simply make your payments on time for about 6 months and when your job history is over a year old then refinance the loan. No matter what the vehicle you should not have any issues with negative equity at that time IMO.
I think you should be fine in your situation. Yes your employment history will be a hinder, but I think that you being in the service is a reasonable explanation. Also, your large down payment should also help outweigh the lack of employment. Your payments should be small, so your DTI shouldn't be an issue.
You should be fine, apply with PenFed for your auto loan, shop other credit union rates if you like. I'd probably suggest it.
The only thing I see that you can do to try to improve your FICO is send GW letters to those creditors reporting late payments. Although, I don't really think its necessary. You're scores are fine, and those late payments are very old. Most credit unions will be able to recognize this and it should be a small factor.
My prediction is that you get 3%, give or take a percent. Don't finance more than 60 months if you don't need to, as rates go a little higher.
Keep me posted if possible.
Ended up moving up my purchase window, there was just too much incentives($3K) available for me not to pull the trigger
In the end I applied to 4 lenders: PenFed, NFCU, USAA, and Ford, got approved at all 4, @ 1.74%, 1.79%, 3.5%, and 3.9% respectively. Ended up going a somewhat convoluted route, went with Ford Credit initially in order to get a $500 incentive, then immediately re-fi'd with NFCU. Total amount came out to around $26.6k.
Now I just need to finish up fixing up the old car and put it up on the market