Newbie questions refinancing auto. LendingTree?

[ScottL]

Hey guys,

 I will try and make this short and sweet.  I am in process of rebuilding my credit. After a year or two, I finally got it respectible to the 650-660 range. Then charged up my credit utilization to about 80% for a vacation. My credit now sits around 630 range.  I am hoping to pay off all my credit card debt within the next 2-3 months.

That said..... I am wanting to refinance my current auto loan. My car is a 2007 and when I purchased it at Carmax a year ago (August 2014), I went with Santander because they required no money down and took my little negative equity I had from my previous car (was breaking down and needed something dependable).  Some lenders were offering lower single digit rates, but wanted multiple thousand dollars down payment.  Santander required $0 down, but gave me like 22% rate.

So I am stuck paying a $450 car payment and I know alot of that is interest.  I want to refinance and save some money.  But i have never refinanced a car before. I am not a member of a credit union.  My car is 8 years old.  Not sure what my options are.  Should I wait until I pay off my debt and my score to improve a little?  should I apply now and just see if i get approved? where? lendingtree?  does going through lendingtree give me like 5 hard hits in one day? how bad will that hurt me?

thanks

[sccredit]

Absolutely wait until you pay your debt down.  Once you do, if you can get over 675 on EQ you can get DCU's lowest rate

[ScottL]

I have never heard of DCU.  Are they good? Is 675 usually common for a lender's lowest rate or is that low and why you are recommending them?

[Anonymous]

I agree with the poster above, you should work on bringing that utilization down which will bring your scores up significantly.  I also strongly reccomend establishing a relationship with a credit union and apply with them when your scores go up.  DCU (Digital Credit Union) NFCU, PenFed and several others have excellent reputations and can save you thousands.  The only other thing you need to be concerned with is the loan to value ratio, You'll need to make sure that what you owe on the car is close to or less than the amount you need for the loan, given it is a 2007 and you have some negative equity combined with really high interest you may be in a situation where the loan to value is too high, hopefully not but you want to know that going in.  With your current scores you should be able to get the APR under 5% which will save you a ton so refinancing is a good idea.

[ScottL]

Sorry, my signature is outdated. That was my scores before the high utilization. My current FICO from my monitoring service on here all 3 are in 630 range. But like I said, before the credit debt was racked up, i was close to 660 range.  So i am hoping, once I pay everything off, i will jump back up.

that said, if i do join a credit union, lets say DCU... do I have to actually "USE" that bank account? or can I just simply open an account and rarely ever use it with a small balance, and still reap the benefits of "being a CU member?"

if i were to join a CU, who would be the absolute best one to join for things like auto loan and maybe credit cards, etc?

[Anonymous]

Most credit unions only require a $5 deposit , you don't have to bank with them just join and apply for refinancing or a credit card when the time is right. Asking which credit union is best is an open question that is very subjective. The cu that get the most positives here are clearly DCU and NFCU with Penfed as a close third for most things. My experience has been than NFCU has the best customer service of the three (i belong to all three) DCU seems to be very flexible and cooperative on car loans. Credit unions are owned by the members so they tend to be very member focused. I dumped Chase totally and have gone to NFCU for all of my banking and don't regret it a bit. Having said that they will treat you well if you have 5 bucks or 50,000 on deposit

[ScottL]

so if i were to open an account with $5, and apply in a couple months. id get the same benefits as someone who's been with them fo much longer and more money in their account? 

[ScottL]

Well I went ahead and opened a DCU savings account this evening.

[ScottL]

just got my email confirmation my DCU account was approved and I am a DCU member now!

not sure how much just opening my account and only having put in $5 initially does for me. But in a couple months when my debt is all paid off, I will apply with them!

[Anonymous]

Congrats on becoming a DCU member, as others have said, pay off what you can first, wait for it to reflect, pull your score BEFORE you apply then contact DCU, they're GREAT