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Low income/ High FICO/ Short credit history

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Anonymous
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Low income/ High FICO/ Short credit history

Hey guys I need some help.

I am looking to buy an $8,000 - $10,000 car. I have a 742 credit score but only 2 years of credit history. I have $5,000 cash to put down on the vehicle but I only make $1,200 a month.

I live at home still and have zero expenses other than this loan I am hoping to get. I know rent and other expenses are calculated when applying for financing but I don't have other expenses, so $1,200 a month is more than enough for a $100-$200 car payment plus insurance.

I tried to apply for a loan through capital one and they didn't even let me apply because I only make $1,200 a month. Will a car dealership give me an auto loan? Do they take into consideration how much $$ I'm putting down before running my credit? Is there anywhere other than a car dealership that might provide me with a loan? Thank you!!
Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Low income/ High FICO/ Short credit history

I recently got a $10K loan with an $1100 monthly income and $3K down through Ford Motor Credit. I pay $500 rent. Had a 780s-790s FICO score with 3 years of history with a single credit card. APR is a bit high at 9% but at least I got the loan. Hope this helps. 

Message 2 of 6
Anonymous
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Re: Low income/ High FICO/ Short credit history

Welcome to the board.  Since you are going to be putting down $5,000, the car financed will likely be $3,000 or $5,000.  That is usually too low for most companies to finance. Your best option is likely going to be getting in with a credit union and applying for a personal loan with favorable interest rate to get the car you want.

Message 3 of 6
Gmood1
Super Contributor

Re: Low income/ High FICO/ Short credit history

It's possibly to be financed. Do you have any way to become a member of Navy Federal? They financed my step daughter with income similar to yours. She financed $6500 and got the best rate.
Message 4 of 6
Anonymous
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Re: Low income/ High FICO/ Short credit history

I agree 100% with those above on going the credit union route,  if you can't get into NFCU you certainly get into Penfed or DCU which are excellent for car loans.  If you have 5k to put down I think you can get this done pretty easy.  I would not go to a dealer without a preapproval in hand because your the kind of person they will shove into an artifically high interest loan (they mark up the APR to make more profit).  Particuarly because you have low income be cautious in your selection of cars because you cannot afford someone elses headache.  There are a lot of lease return cars on the market right now so you may be able to get a 3 year old Corolla or other economy car in your budget that would be pretty solid.  

Message 5 of 6
Anonymous
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Re: Low income/ High FICO/ Short credit history

I agree most finance partners of dealerships are not looking for small loans on, obviously older cars

As stated a CU, like Navy be careful because some places are also age sensitive only lending on cars X years old etc

However, overall 2 years of history is fine
Score is fine, Income isn't a problem as your debt load will still be low
Your down is more than fine

Again the questions come about on loan amount being too low for some and age of the security being to old for others.

That being said your down payment is too big IMO not to secure financing
a) Neither my 21 nor 19 y.o. put down anything in securing loans in that range with obviously light profiles, one via CU ( Navy) the other via Dealer financing ( Toyota)
Message 6 of 6
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