I am wanting to get a new car, I don't necesarily need it, but mine is 8 years old and want to upgrade to a newer model. My non auto enhanced scores are EQ 637, TU 659, EQ fako 690 and looking to trade my current car in on the new one. KBB/Edmunds on it is worth about 6.5K, but it was in an accident so I'm guessing closer to 5K for the trade. I am looking at several SUV's in the 20-30K price range. 2013 Subaru XV Crosstrek Limited, 2013 Honda CRV-EX-L, 2013 Hyundai Tucson Limited, 2013 Ford Escape. I make 37K a year and my cc utilization is currently sitting about 65%, due to Holidays, but paying it down. I don't rent, but live with my partner who owns his own home, so I don't have to pay towards a mortgage or rent. I have one previous auto loan where I was the co-owner, not the primary. I have a couple of baddies on my report, 3 30 days late on the auto loan, last time was Oct 2009, and five 90-180 days late on a student loan Oct 2008-March 2009. No late payments since then, and I actually got all my CC after that to enhance my profile. What's my chances of getting approved now and what rate? And what if I waited 6 months and got my utilization down to say 30%, would that make a big difference in my rates?
Short answer: lowering your util from 65% to <30% should provide a nice score boost, therefore lowering your rate when shopping for an auto loan. Sorry I can't be more precise.
Although the late payments are somewhat aged they are going to present a challenge in your next car loan due to the fact that they were on a car loan and another installment loan. Although you do not have a housing payment your income may also present a challenge at the upper end of your desired loan. I think the advice given above to lower your CC utilization as much as possible and give the late payments a little additional time to age is solid. You will be able to find financing with the trade in value being 20 -25% of the loan but the initial interest rate will not be at the best terms available. I would hazard a guess at upper single digits to lower double digits offers.
If you have a primary banking relationship with a lender other than your previous car loan I would probably try to secure pre-approved financing with them prior to going to the dealership so you at least have an idea of where you are. Then challenge the dealer to beat your in pocket offer.
I appreciate the advice, and was planning on waiting a few months while I reduced my utilization. Considering I was at 700 before the utilization hit, I had figured paying it down would boost it back up to that kind of range. I am open to new and used cars, and honestly I don't really care that much about the rate, just don't want to get messed over too badly when I'm ready to buy. If I don't like it, I can always refinance after 6 months to a year, I suppose. Thanks again.