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How do lenders look at scores?

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Anonymous
Not applicable

How do lenders look at scores?

As I am looking into buying a car, I am wondering how lenders view scores. Do they only look at score, or do they look at components of the score.

 

For example, I have a very long credit history, low utilization, and good credit mix but have 5 lates on one credit card and a collections from about a year and 7 months ago.

 

I am wondering if they see the lates and collections and disregard the positive factors or if they strictly look at score.

 

I have mediocre scores:

 

TU: 655, EX: 671, EQ: 665

 

And am wondering if I should even bother applying for a loan.

Message Edited by rengler2208 on 11-20-2008 07:29 AM
Message 1 of 4
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Anonymous
Not applicable

Re: How do lenders look at scores?

Just a guess based on my experience and the experiences related by others, but I think they do.  Maybe not always a human, but I bet the computer systems they use check more. In my case, the first time I went for an auto loan my scores were fine (700+ a couple of years ago, before the current credit crunch) but I was denied due to short credit history and limited experience with larger credit limits. 

 

One thing you could try if you don't want to take a hit for an inquiry is try working with a local credit union.  Print off your reports and the scores you got from MyFico and ask if you can walk through your situation with someone at the CU.  They should have a good idea of whether you can get a loan.  If you can't, they might be able to tell you what you could do.  A big down payment might help, for instance.  Or maybe a co-signer could help smooth things out.

 

It looks like you are already working on paying off an outstanding balance on a closed account and sending GW letters.  If you can wait a little longer till these things are done and reflected in your reports/scores, that would be most helpful.  At least the marks are not fresh, that should help.

Message 2 of 4
Anonymous
Not applicable

Re: How do lenders look at scores?

In the current credit environment, most lenders are going beyond the score and looking at the history. How old are your lates? You might have an easier time getting a loan once your collection is 2 years old.
Message 3 of 4
cobra19
Valued Contributor

Re: How do lenders look at scores?

rengler - for someone with a very long credit history and low utilization, your scores should be higher. However, your scores are, IMO, pretty good. Before applying for an auto loan, I would GW the lates - you have nothing to lose. Go to jigsaw.com, locate the email address of an officer (director, VP, etc) of the company you are GWing and email them.

 

Your collection is fairly recent and it is killing you - I assume it is your only collection? Is is paid off? If not, try to pay it and offer a PFD. The collection will still show, but a manual review will show it as paid off.

 

Next, when looking for an auto loan, I would visit a CU. See if you qualify for one of the biggies (NFCU, PENFED, etc) - do a search here of CU's. IMO,  a CU will usually offer a better rate than a dealer or bank. And a CU is easier to work with.  

 

 

 

 

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