Keep Trying After Getting Denied by Credit Union?

[Anonymous]

My credit union just denied my application for a new auto loan.  I don't know if I should give up or try to find a different lender.

My income is high (around $110K), but I have the student loans to match, so my DTI with my desired new car payment would be around 48-49%.

My credit scores are decent - FICO 747, 724, and 739.   I have a long, established credit history with no collections, deliquencies, or any derogatory information.  I also have a diversity of debts (mortgage, car, student loans, credit card, etc.)

What keeps my scores low (and why my credit union says they rejected my application) is that I have a lot of unsecured debt, including student loans and (worse) credit cards with utilization rates around 75%.  Total credit card debt is around $45K. 

I know the debt isn't pretty but we are in a position finally to start chipping away at the debt quite a bit, even with a new vehicle loan.  In fact, we've already reduced our debts a ton from where they started.  Waiting several months to get the utlization rates on our credit cards at 30-50% is going to be a real hardship, because of a family planning surprise meaning our vehicles won't hold everyone anymore. 

Is it worth it to try other lenders, or am I going to be told the same thing by everyone?

[TRC_WA]

I wouldn't bother with other lenders till your UTI is lower.

You may get lucky and score an approval somewhere but 75% CC UTI is ugly... and dragging down your scores.

[Creditaddict]

Do you have a car payment now? How much?

Are you trading in?

What kind of car do you want to buy?

[Anonymous]

I have two car payments currently. One is for $250/month. I owe 14% of the original loan amount now, and I have the cash to pay that off tomorrow if I want (which I do; that is the plan). If I do nothing, that car will be paid off in 8 months.   The other vehicle is $200/ month, and I owe 18% of the original loan amount.  The plan is to trade that one in.  There is equity on both cars.

We want to buy a minivan, with a monthly payment of $300-$450.

I got the denial letter from the CU today. I am so confused. It says Equifax has my credit score at 714; myfico listed my Equifax score at 747 the day after. CU uses regular fico not auto enhanced (which is too bad bc my auto enhanced is 760).  Meanwhile, it says the number of inquiries are a key reason for my low score... but I only have two showing up and two that I know about (one for a re-fi in January that saved me $600/month) and one from the CU.  It also says the amount of debt is a big problem in addition to the debt to credit ratio; I didn't know credit scores factor in AMOUNTS owed because they d

[Creditaddict]

When buying a brand new car these days it's almost always best just to use the financing available through manufacture since so many of them are runnign 0% and they will push through higher DTI ratios

[Anonymous]

this is not a paid ad but DCU with your auto  enhanced score is almost always a instant approval.  Util might be high to some but income is the key at DCU.  Plus 1 loan is coming off.   apply for the car loan and when approved then get membership approval.   I got my auto loan from them in 10 min.  no hassle at all and very easy to talk with 

[TRC_WA]

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@Anonymous wrote:

 It also says the amount of debt is a big problem in addition to the debt to credit ratio; I didn't know credit scores factor in AMOUNTS owed because they d

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Yes they most certainly do factor in the amount owed.

Your balances are 2nd only to your payment history in determining your FICO score which is why I said your 75% CC utilization is dragging down your scores.

[Anonymous]

No, I get impact of the % of credit utilization. What I didn't expect was them to list the % as one derogatory factor, and the dollar amount as a second.

[Anonymous]

Which minivan are you looking at?  Chrysler would be no problem at all if you are interested in a Dodge Grand Caravan or Chrysler Town and Country. I just bought a new 2015 Dodge Journey, FICO scores 517 to 568 depending on which way the wind was blowing, rate was 8.04% through Chrysler capital. My utilization is 107%, income 66k, dti 40%. No auto baddies in 5 years. 

[Dreamer13]

I had high DTI and utilization and was approved within 5 minutes at dealer for NMAC a month ago. My rate was right at 4% as I couldn't use rebate and promo interest rate together. My scores are a little lower than yours - between 680 and 700 but otherwise situation is similar. DCU initially approved me to only change their mind. I'd think you would do great with captive lender.