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Shopping for Auto Loan, Not Sure if I Qualify

New Visitor

Shopping for Auto Loan, Not Sure if I Qualify

Credit Score: 627/629 

AAoA: 1yr 4mo

# of positive trade lines: 3

# of negative trade lines: 6

Income: $76k/yr

Length of Employment: 9 yrs

Previous Loan Experience: Currently have an auto loan with Wells Fargo Dealer Svcs - Since 2013 

Debt-to-Income (DTI): 22%

Year of Car: 2015 or newer

Miles: N/A

Purchase/Refinance: Lease/Finance

Requested loan term (XX Months): 48-60

Down payment amount: $6000

Co-borrower/Co-Signer: Co-borrower, husband, but his credit is -50 points than mine 

Looking to finance an SUV, preferably in the $18-24k range. 

 

Did the CapitalOne Auto Finance soft-hit pre-qualify online, was not approved. 

I also have about $4200 left on my current loan with WFDS that I've had since 2013 and I could esily just pay it off in full tomorrow if I wanted to, but I don't want to take the hit on my credit for closing the account a year early. They're also a horrible bank and I don't want to finance another car with them, my current loan was 19%. 

I  currently bank with Chase, so maybe hoping they could work with me and maybe roll what's left on my current auto loan into a new one. 

Any thoughts? 

5 REPLIES
Regular Contributor

Re: Shopping for Auto Loan, Not Sure if I Qualify

What are your future credit plans? The reason I ask is that if you're willing to take the hit on inquiries, then letting a trusted dealer blast your app out is the best way to go. Others will strongly disagree, but here's the thing. In regards to credit score, all auto finance inquiries in a 2 week period are treated as one pull. That's for credit score, not for overall credit. If applying for a mortgage or if you'll need other loans or cards in the near future, some will still view the total number of inquiries as a negative even though the hit on your score itself will be minimal.

 

The reason that most people will disagree is because they don't trust car dealers and for the most part neither do I. When I purchased my car, I would not fill out an app until I spoke to the finance manager and made it crystal clear to him that he could not "shotgun" my apps. I explained that I needed to minimize my inquiries for important loans in the near future. I explained that I understood the difference between inquiries listed versus the single hit on my score. I told him to look at my credit, take his best single shot with it, and then call me before taking another shot. He did as instructed and got me in with GM Financial for $28k with $3500 down. My wife's TU Auto was 625 and I didn't have a score for being too new.

 

There's a difference between not trusting a car dealership and fearing them. I had no fear. I explained exactly how I wanted it to go down and they complied nicely. Yes, they want to make money on the loan, but at the end of the day they'll take a skinny deal before they pass on a deal. If you go in with a full understanding of your situation, you can make it work for everyone involved.

1 Timothy 6:10
Message 2 of 6
New Visitor

Re: Shopping for Auto Loan, Not Sure if I Qualify

I actually only have one other hard inquiry on my credit right now, and it's pretty recent, I got a new credit card in February of this year, so that's what it's from. 

My future credit plans at this point is I only need a new vehicle, I can't fit 3 kids(2 of them in carseats still) into the backseat of a Toyota Corolla anymore, so I need something bigger. 
Getting more CC's or applying for a mortgage are not something I need in the near future, I can wait a few years on that. 

Message 3 of 6
Regular Contributor

Re: Shopping for Auto Loan, Not Sure if I Qualify


Mabel216 wrote:

I actually only have one other hard inquiry on my credit right now, and it's pretty recent, I got a new credit card in February of this year, so that's what it's from. 

My future credit plans at this point is I only need a new vehicle, I can't fit 3 kids(2 of them in carseats still) into the backseat of a Toyota Corolla anymore, so I need something bigger. 
Getting more CC's or applying for a mortgage are not something I need in the near future, I can wait a few years on that. 


Then I would let the dealer do their job with limits you impose in the beginning. The caveat there is that you won't necessarily get the best rate that way. Letting them shotgun it may be your best bet. Again, with nothing planned in the future and no additional hit on your credit score, it's the best way to get into the right-sized car.

1 Timothy 6:10
Message 4 of 6
Valued Contributor

Re: Shopping for Auto Loan, Not Sure if I Qualify

I politely disagree with the advice above.  Even with your so so credit scores I think you have a shot at a decent rate from one of the credit unions like DCU, NFCU or Penfed.  Having the dealer shotgun your credit app will result in a qualification but it will come at a price, likely of at least 2-4% more in interest.  I would try one of the credit unions I have listed or a local credit union.  The Capital One SP approvals are a little weird, I tried it out of curiousity and was denied even though I got a loan from Penfed the same day for under 3% over 72 months so I wouldn't take the Capital One denial as an indication you won't qualify elsewhere.

 

Lenders are gettng more conservative with folks with lower scores like yours so you may have to settle for higher interest.  Be really careful to have a good loan to value ratio, don't let the lender run up the price with a bunch of overpriced warranties you don't need so that down payment goes to good use so if you get stuck with a higher interest you can refinance down the road for a lower APR.  I would suggest you check out the rebuilding section and see if you can take some actions to rehab your score and that of your spouses.  You might be surprised at how easy it is (takes time and patience) to improve your scores.  I started in the low to mid 500's in mid 2014 and should go over 700 soon .  Just getting your scores to the mid 600's will change a lot in your credit life so its worth the effort for sure.

 

Best of luck, let us know what you decide and how it goes.

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores Aug 2017: EQ 675 TU 695 EXP 698
Message 5 of 6
Valued Contributor

Re: Shopping for Auto Loan, Not Sure if I Qualify


Federalist wrote:

What are your future credit plans? The reason I ask is that if you're willing to take the hit on inquiries, then letting a trusted dealer blast your app out is the best way to go. Others will strongly disagree, but here's the thing. In regards to credit score, all auto finance inquiries in a 2 week period are treated as one pull. That's for credit score, not for overall credit. If applying for a mortgage or if you'll need other loans or cards in the near future, some will still view the total number of inquiries as a negative even though the hit on your score itself will be minimal.

 

The reason that most people will disagree is because they don't trust car dealers and for the most part neither do I. When I purchased my car, I would not fill out an app until I spoke to the finance manager and made it crystal clear to him that he could not "shotgun" my apps. I explained that I needed to minimize my inquiries for important loans in the near future. I explained that I understood the difference between inquiries listed versus the single hit on my score. I told him to look at my credit, take his best single shot with it, and then call me before taking another shot. He did as instructed and got me in with GM Financial for $28k with $3500 down. My wife's TU Auto was 625 and I didn't have a score for being too new.

 

There's a difference between not trusting a car dealership and fearing them. I had no fear. I explained exactly how I wanted it to go down and they complied nicely. Yes, they want to make money on the loan, but at the end of the day they'll take a skinny deal before they pass on a deal. If you go in with a full understanding of your situation, you can make it work for everyone involved.


Not to be a jerk but you should share the part about the 18% interest that came with that deal.  Sometimes you have no choice but to take the high interest but I think the OP is best served by using an HP or two on some lower interest options before they head to the dealer.

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores Aug 2017: EQ 675 TU 695 EXP 698
Message 6 of 6