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Here's what I've got going on...
About two weeks ago my 2005 F-150 Lariat SuperCab was stolen. I purchased this truck in 2007 and it was financed through Capital One. I put $3500 down and being that my auto-enhanced scores were less than desirable (lates from several years in the past) I was at 18%. Eight months after buying the truck I re-financed through HSBC at 14.9% and took the loan down from 72 months to 60 months. My FICOs at this time (of purchase) were about 630. At re-fi time, they had dropped because of the added collection.
Fast forward to this disaster...after it was stolen I filed the insurance claim. I then pulled out all of my paperwork to look at the terms of my GAP insurance because I owe $19K on the truck and it is worth roughly 17K. Well little did I know that when I re-fied the GAP does not carry over. So I'm gonna be on the hook for the remaining balance...this will come into play later.
My insurance claim rep said that I should receive a settlement on Monday. So for the past two weeks I have begun the tedious task of looking for a new truck. I finally found one that I wanted today. It is a 2007 F-150 FX4 with only 16K miles on it.
I've been reading this forum for a solid two weeks to brush up on car buying tips and how to approach the finance guys since I know my credit is less than desirable right now. I pulled my reports recently and I'm at 584 TU and 603 EQ.
The reason for the drop was an added collection that I am disputing and in the process of settling. However, the point of contention today in the dealership was not the collection, it was not even brought up!
They showed me my credit and it looks like they only pulled Trans Union and it was at 592 (auto enhanced, I suppose). The finance guy told me that the banks are stressing over my debt % usage.
It is high (about 80%) and I know that and have been working it down for a year as best as I can. I've had no need to apply for credit since I bought my truck in 2007 and did not think I would be car shopping any time soon, so I was slowly working towards getting back to the 630-640 range and even higher.
But here I sit, in a position where I need to get financed. My payment history for the past two years has been spotless. As I said, I was approved for a re-fi at 14.9% with the same FICO scores then as now, for the most part.
He showed me their tier and I am in good ol' bad number 5. He stated that I was "TD'd [turn downed]" by Capital One, Ford, and several other places that I cannot recall. He said that he is going to talk to Ford again on Monday to try to push it through and also has to talk to Chase (their sub-prime lending arm, not the good credit portion of the company).
I got the price I wanted, I want the truck, I can afford the payments and all of that...although he said that it may be at 18% again, if he can get it done. But I don't see this happening. So because some schmuck jacked my truck, I am in a bad spot.
I have 2K to put down on such short notice. That is what they wanted. They also require me to pay any remaining balance to HSBC that the insurance settlement does not cover. However, rolling this into the loan could be an option.
My idea to him was what if I take this 2K and pay down my balances on my cards, let the FICO's adjust and then come back. My CC breakdown is as follows:
1. Bank of America 3000K limit; 2780 balance
2. Capital One 500 limit; 375 balance
3. HSBC 1000 limit; 900 balance
4. Credit One; 450 limit; 340 balance
5. Salute 650 limit; 400 balance [although this shows as closed since they dropped the program]
6. CLC 500 limit; 400 balance [also close due to discontinuation]
TOTAL = $6100 / 5195 = 85%
He stated that my FICO's would go up to the "high 690's" if I dropped my utilization to below 50%.
What would you guys do if you were in my situation? Take the 2K and pay down the debt? And if so, would you spread it out? If I paid off Salute and CLC then my utilization goes UP because they are closed, right?
I make about 60K a year, have a steady job, have ZERO late payments on ANYTHING since 2003. I repeat, I have not missed or been late on a payment in SIX years.My problem is the high debt I'm carrying.
He also suggested asking for CLI's to help. But after reading the CC forum last night, I may get laughed at if I call the backdoor numbers and ask.
Help. I'm sorry if it is long, but I tried to lay it out as best as I could.
Thanks.
In a situation such as this,I can only tell you what I would do. I know you probably need a vehicle ASAP,but the smart thing is actually to get the util down,so your score would go up and you could get better rates. Or............(you probably won't like this one) pay cash(for now) for a nice dependable vehicle to get you to and fro,pay your debt down,then in about 6 months or so,you should have a score high enough where you can walk into a dearlership and practically write your own ticket.
Best of luck to you
Thanks...well, there is an update to this.
My stolen truck was recovered Sunday morning. I was supposed to receive a settlement on it today from the insurance, but now that it has been found and recovered that is on hold. I picked it up from the impiund yesterday and it is all jacked up. The damage may exceed the totaled percentage, so I may be able to get the new truck still.