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So, I have a 1 year old credit history, currently scoring 730, with 6 cards totalling around $19k in limits and typically <1% balances. I initially set out to get a loan/lease, and thought of trying the cap1 pre-approval as a field test - got denied because of thin profile and no auto loan history, however they said the fico auto enhanced score was 702 - does it even matter LOL??
So, following all the web advice, I am going for a $5k 12 month loan from my CU - basically picking up my Aunt's car. The goal is to hit Tier1 for leasing a premium brand like Audi/BMW/whatnot, as soon as possible. I could clear the loan in like a month or two, but the kind people at the CU advised me to hold the loan for at least 6 months. Do I need to keep it that long?Practically trying to buy my way into Tier1. The end goal is to get a rock bottom MF lease asap. I am tempted to try at the 3 month mark. DTI should not be a problem honestly, my annual is higher than the MSRP of these cars.
Btw, getting the loan at 4.59% APR and additional 0.25% off for auto-pay. This is for purchase from a private seller. Is this a good deal?
@Anonymous wrote:So, I have a 1 year old credit history, currently scoring 730, with 6 cards totalling around $19k in limits and typically <1% balances. I initially set out to get a loan/lease, and thought of trying the cap1 pre-approval as a field test - got denied because of thin profile and no auto loan history, however they said the fico auto enhanced score was 702 - does it even matter LOL??
So, following all the web advice, I am going for a $5k 12 month loan from my CU - basically picking up my Aunt's car. The goal is to hit Tier1 for leasing a premium brand like Audi/BMW/whatnot, as soon as possible. I could clear the loan in like a month or two, but the kind people at the CU advised me to hold the loan for at least 6 months. Do I need to keep it that long?Practically trying to buy my way into Tier1. The end goal is to get a rock bottom MF lease asap. I am tempted to try at the 3 month mark. DTI should not be a problem honestly, my annual is higher than the MSRP of these cars.
Btw, getting the loan at 4.59% APR and additional 0.25% off for auto-pay. This is for purchase from a private seller. Is this a good deal?
Welcome and congratulations on building your credit responsibly and carefully. WIth your low limits and short AAOA it can be difficult to secure a car lease or loan, remember every time you add a card or loan you hurt your average age of accounts, you need those accounts but you need to strike the balance. Anyway I think buying a cheap used car and financing it is a great way to build an installment loan history, I think you will need at least 6 months to make this work probably more if you want tier 1 on a lease. You don't want a bunch of hard pulls for car loans spread over months so better to be patient and pull the trigger when you are going to get approved than getting a bunch of HPs from trying to get financed too soon. Its less risk on a lease because the dealer will only shop your app to their captive lender for a lease but if you go the purchase route this is a reason to get prequalified before you walk in the door. Your APR on an older used car is excellent so you have a good credit union your working with. Personally I would do this for a year and then you will be good to go. Sell that car on the private market because if you trade it in the dealer will give you nothing for it and you could end up having to bring negative equity to the deal or put money down to make up for their low trade in offer.
Thanks for the reply! the car is actually going to go back to the seller! stays in the family, which is why I am not worried about negative equity. I understand the HP issues with dealer financing - I truly detest it. In fact, I first tried to engage with a local jaguar dealer , telling him my scores etc without filling their credit application. Their interest died down to zero when I said no to credit app, asking them to throw some numbers first on the basis of their experience with such profiles. I was expecting some interest, if not a nosy car salesman.
6 months is going to be a really long time, cant imagine what a year could be. Should have done this much earlier..
@Anonymous wrote:Thanks for the reply! the car is actually going to go back to the seller! stays in the family, which is why I am not worried about negative equity. I understand the HP issues with dealer financing - I truly detest it. In fact, I first tried to engage with a local jaguar dealer , telling him my scores etc without filling their credit application. Their interest died down to zero when I said no to credit app, asking them to throw some numbers first on the basis of their experience with such profiles. I was expecting some interest, if not a nosy car salesman.
6 months is going to be a really long time, cant imagine what a year could be. Should have done this much earlier..
That's a perfect plan. I am assuming your young, if so the sales guys and managers don't want to invest time in someone that might not get approved. The reality is they are using interest markups and other games to help maximize profit so they don't want to even talk numbers until they have the ability to figure out how to get money on the back end. I think it is a huge mistake for them to treat people this way but they do it all the time. This is why I always get preapproved through a credit union before I walk in. There are tricks such as letting them give you crappy financing and negotiating a much lower price and then turn around and finance on your own the next day that can be employed but you need to know what your doing to pull that off. I got a hell of a deal on an F150 doing that but almost got punched by the finance manager when he I dropped off the title to my trade in. Sounds like your going to lease so I would read up on leasing big time and my suggestion would be to look for published lease deals for the car you want and stick to those elements which ensures you will get the best deal.
Best of luck