Used auto loan with TU 723/Equifax 733 from myFICO with ~80% DTI

[Anonymous]

I've made a lot of mistakes with discretionary spending (which I want to fix as well) and run up my revolving balances over the past several years but have never missed a payment. I'm moving to a new area (and will need to apply to apartments probably as well -- worried about that) and will need a car there -- I will be working odd hours in an area that is not so safe that also does not have many public transportation options. I probably applied for too much in the beginning, but was denied by my credit unions. I'd now like to ask for <$15000 for a 60 month term on a used car, but will I be able to find financing on my own? If so, where should I apply? I make about $40000/year. And definitely need to reduce my DTI ratio...Thanks for any advice.

[Creditaddict]

you won't get financing anywhere in my opinion as long as you are over 50% DTI and for instance my CU says under 32% DTI.

[Anonymous]

Ok, lets talk.

Sounds to me that you may have a young/thin credit file.

if your credit union denied you, they simply may have stricter lending standards then others. youmay be able to get a loan elsewhere, but you may pay for that in interest and terms.

Apartment aps really do not look at your score so much, they are more concerned if you have any judgements from past leases.

to my knowledge,  most do not even pay for a score, they just are looking to see if any landlords have sued you and if you have a history of paying your bills.

If you make 40K a year that menas you are making:

$3333 a month gross and about $2500 net  somewhere in that area? That dioes not leave you a lot if you are rpaying rent and bills and looking for a car payment.

You may need to be a roommate somewhere. Check BBs postings, craigslist, your new employer.

A dealerships financing maybe able to help you, if your willing to let them give you a less then perfect interest rate

[Anonymous]

So I should have said that 80% is my revolving credit usage (not great I know)...and that my DTI (which I am assuming means the minimum amount I am required to pay on all my credit cards each month versus my gross monthly income) is actually about 40% (I'm rounding up the cc payments too)...the only thing is that I've recently been trying to pay down some of those balances, so I've made larger than required payments; Wells Fargo said they were looking at those payment numbers and assuming that they were my required monthly payments, which is not true! PenFed also said that I had a lack of recently opened accounts...I thought that was supposed to count in one's favor?! I'm so confused...I do have a problem with overutlizing my revolving credit which I have resolved to change, but I am also not applying to take on something I wouldn't be able to make the monthly payments on...

Thanks for the reassurance on the apartments though...as I said I've never missed a payment on anything, including rent (I can even have previous landlords act as references if necessary)...I was also out of the country for about five years and just recently moved back in August...and then got a new job in December...and moved again in March. Do I just look really shady to creditors even though I'm actually not at all??!

[Anonymous]

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@Anonymous wrote:

So I should have said that 80% is my revolving credit usage (not great I know)...and that my DTI (which I am assuming means the minimum amount I am required to pay on all my credit cards each month versus my gross monthly income) is actually about 40% (I'm rounding up the cc payments too)...the only thing is that I've recently been trying to pay down some of those balances, so I've made larger than required payments; Wells Fargo said they were looking at those payment numbers and assuming that they were my required monthly payments, which is not true! PenFed also said that I had a lack of recently opened accounts...I thought that was supposed to count in one's favor?! I'm so confused...I do have a problem with overutlizing my revolving credit which I have resolved to change, but I am also not applying to take on something I wouldn't be able to make the monthly payments on...

Thanks for the reassurance on the apartments though...as I said I've never missed a payment on anything, including rent (I can even have previous landlords act as references if necessary)...I was also out of the country for about five years and just recently moved back in August...and then got a new job in December...and moved again in March. Do I just look really shady to creditors even though I'm actually not at all??!

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You are fine.

Assuming you have a History handlingbig lines of credit, or previous car loans, You just need to have a 10-20% downpayment, and you need to wait until the overpayments you made on your credit accounts shows up.

I think you should have no problem securing a reasonable car loan as long as you have a downpayment.

You are applying (especially PENFED) at some very conservative lending institutions. I think Dealer financing would not be a problem.

Are you military?

[Anonymous]

Thanks for the reply. So the credit scores pulled for the auto loans I applied for have ranged from 659-720, don't know if that's what people mean by "auto enhanced" (or not so enhanced in my case)? I'm not military though. I was only approved by Cap One (@8.8% for a used car in the likely year range I'd end up getting, definitely high but I'd probably try to refinance in another year)...today is the last day in that 14 day window of loan applying and I've test driven cars but not settled on one...am thinking about waiting until the end of this month (but that's as long as I can wait) and I guess if I'm certain that's the car I'm going to get one more pull would be OK? (And then I won't apply for anything for at least another year, ha) Assuming steady paydown of my revolving credit usage along with consistent payments on the auto loan, would this theoretically improve my credit score? More than just paying down the credit usage (though yes I would be able to pay more if I didn't have to get a car)?

Also hurting me was the fact that I've been with my current employer for only about 5 months (was government previously), and will be starting a different position next month (at a larger more well known employer that I expect to be working for for years)...I guess I shouldn't apply for refinancing until after I've been at the new position for at least a year?

And a little off topic, but do you have any suggestions for negotiating for the price of the car?

[Anonymous]

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@Anonymous wrote:

Thanks for the reply. So the credit scores pulled for the auto loans I applied for have ranged from 659-720, don't know if that's what people mean by "auto enhanced" (or not so enhanced in my case)? I'm not military though. I was only approved by Cap One (@8.8% for a used car in the likely year range I'd end up getting, definitely high but I'd probably try to refinance in another year)...today is the last day in that 14 day window of loan applying and I've test driven cars but not settled on one...am thinking about waiting until the end of this month (but that's as long as I can wait) and I guess if I'm certain that's the car I'm going to get one more pull would be OK? (And then I won't apply for anything for at least another year, ha) Assuming steady paydown of my revolving credit usage along with consistent payments on the auto loan, would this theoretically improve my credit score? More than just paying down the credit usage (though yes I would be able to pay more if I didn't have to get a car)?

Also hurting me was the fact that I've been with my current employer for only about 5 months (was government previously), and will be starting a different position next month (at a larger more well known employer that I expect to be working for for years)...I guess I shouldn't apply for refinancing until after I've been at the new position for at least a year?

And a little off topic, but do you have any suggestions for negotiating for the price of the car?

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8.8% is not high. What rate are you expecting? 8.8 Easily falls into an "average" range set up by most institutions. Yes some credit unions or banks advertise 2.9-5.9, but I really doubt you would qualify for that in most cases.

[Anonymous]

Thanks, I guess I was unrealistically hoping for something lower, but 8.8% is still doable (or 7.55% if i get a slightly less used car) and I'm grateful that Cap One offered me the loan...seeing some of the weird commentary on them out there does make me pause a little bit, but since I actually do need a car I guess have to take what I can get. Will making payments as required and eventually paying it off help my credit score? And will having this first auto loan help me get another one in the future (assuming also my credit utilization situation improves to more reasonable levels, ideally to no revolving balance)?

[Anonymous]

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@Anonymous wrote:

Will making payments as required and eventually paying it off help my credit score? YES And will having this first auto loan help me get another one in the future (assuming also my credit utilization situation improves to more reasonable levels, ideally to no revolving balance)?YES

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