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Established Member
Posts: 10
Registered: ‎05-15-2008
0

score of 640, but auto loan interest of 15%?!?!

i bought a car last month, with a co-signer without looking into my credit score beforehand and just assuming that the outcome would be good due to my student credit card of almost a year now. the interest came out to 15% however, but my fico score is 640. now i know my scores not that good but its not that bad either. what should i do? im only 19 years old and paying a lot for my new car monthly. is it too late to dispute any claims or whatever to possibly lower my interest?
Super Contributor
Posts: 5,703
Registered: ‎10-06-2007
0

Re: score of 640, but auto loan interest of 15%?!?!

You could try to refi with say a credit union.  How was the co-signers credit? Who gave you the loan?
 
The reason you may have been given 15% is that you have a very short credit history,  Auto and home loans dont just go on credit score alone.  They might view someone with a 640 score and a 20 year history differently then one with a 1 or 2 year history.
 
FICO scores are like an SAT score in getting into college.  They also review your transcript as well.
11/28/2014 FICO: EQ: 796 EX:788 TU:803
Established Member
Posts: 10
Registered: ‎05-15-2008
0

Re: score of 640, but auto loan interest of 15%?!?!

hey marty! thanks for responding. as far as my co-signers score, im not sure exactly but i know they recently purchased a car of their own and his interest was 11%. wachovia dealer services gave me the loan. i was looking into refinancing, but when would be a good time? i was thinking about taking my co-signer off as well when i do refinance, if my credit history is substancial enough. i just feel like im not getting anywhere near my final amount with more than half of my monthly payments going towards interest, rather than the payment of my car. id rather be putting that money in towards extra payments or maybe even towards another car i desire more.
Super Contributor
Posts: 5,703
Registered: ‎10-06-2007
0

Re: score of 640, but auto loan interest of 15%?!?!

I would not apply for a refinance the  loan unless I was sure I could get it.  I think your best bet would be to join a credit union and then speak with a loan officer and show them your credit report and see if they will approve you.  In this way you save a INQ on your credit report.
 
At 19 you are just starting out in the credit world so it may take some time to get were you want to be.
 
So you know where I am comming from I was so bad with my credit that I was in 70k of credit card debt and it cost me a relationship and almost my job.  It took my almost 5 years to get out of debt which was in November..
 
Things are great now but here is the advice I would give to.
 
 
Never pay late.  Never ever ever.
 
Except for a car loan and a home, dont buy anything with a Visa or Mastercrad unless you can pay it off in 1 to 12 months.
 
A store card to buy a big ticket item over a 24 or 36 month period is okay as long as it is a 0% and you have to pay before the end of the loan so you dont get all that back interest.  If you dont pay even one dollar by the end of the interest free term, you owe interest on the whole amount for the entire term of the loan.
 
If you have medical biils you cant pay try to make arrangements to pay.  That also goes for any loan.
 
Dont imitate people who go out and try to get lots of credit cards.  A single VIsa/MC, store card and Gas card should be good enough.  I have a Visa card, a Sams card, and a Gas card.
 
Finnaly be patient.  I am almost 52 and didnt get my act together until 5 years ago when I entered a DMP program to pay my 70k of debt off.  Most of the debt was buying things I didnt need or could of waited for.  You dont want to learn the hard way like I did.  I wish this forum was around when I was 24 and started my road down to credit hell.
 
Use me both as a bad example and a good one.
11/28/2014 FICO: EQ: 796 EX:788 TU:803
Valued Member
Posts: 31
Registered: ‎03-23-2008
0

Re: score of 640, but auto loan interest of 15%?!?!

marty..i couldn't agree with you more. was in a similar situation and have slowly began to get my act together..my scores are finally rising. i agree with you. if i pay anything with a credit card now, i nearly have a heart attack when i pull the card out to use. but trust me. like yourself, i pay the balance off in full each month. the longest being a month and a 2 weeks at the most when i have paid my balance off. i tell any young person now, debit cards, pay everything in cash if you can, and above all protect your credit at all cost. check it daily obsess over it..if i knew now what could have known in my past, ahhhh, what heartache i would have saved myself. trust me young people don't try to impress your friends with buying stuff even unnecessary stuff..think long term..think house, savings, investments..trust me..truuuuust me..you will save yourself so much heartache in the long run buy protecting your credit at all cost..
Frequent Contributor
Posts: 366
Registered: ‎12-20-2007
0

Re: score of 640, but auto loan interest of 15%?!?!

Most banks wont let u refi until at least a year! bc of outstanding balance pay on the car one year with perfect history and you will see score increase I got +140 after 8 months.... no lates! always on time No matter what!:smileyvery-happy: Then get a new loan on your own but u first must show responsiblilty!
~EveryThing Is Within REach~FICO FORUM roCKs.....
Contributor
Posts: 79
Registered: ‎03-06-2008
0

Re: score of 640, but auto loan interest of 15%?!?!

not sure if you are eligible for USAA but they refi-ed me just a month after I bought my car. Went from a 9.99 to a 6 percent

Starting Score: 690
Current Score: 747
Goal Score: 750


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