Established Member
bmartinta
Posts: 16
Registered: ‎09-15-2012
Auto Loan after 2 Charge Offs that are 3 years old. 607 FICO

Pretty simple. I have two CC Charge Offs - Chase and Cap 1. Chase sold the account and is reporting $0 ballance, but CAP 1 is still reporting monthly with a ballance of $1500. My original debt at the time I stopped paying was $750. My Chase account was $1,055. CAP 1 reporting is killing my score because it shows 130% credit util. Both accounts are unpaid and will hit the SOL in the next few months. 

 

Here is the deal. I am trying to get myself into a different car. I have a score of 607 and have been in good standing since Feb 2011. I have roughly $50k in Student Loan debt which I pay $600 monthly. My anual salary is $65k. I can afford up to $7,000 downpayment and am looking for a vehicle >25k. My question is will any lender approve me at a reasonable interest rate with those two unpaid charge offs showing on my report? The only reason I havnt paid them is because it does me no good as far as my score goes, but I am beging to think it might be worth to PIF and start building with a secured card. 

 

Thoughts?

Established Member
bmartinta
Posts: 16
Registered: ‎09-15-2012
Re: Auto Loan after 2 Charge Offs that are 3 years old. 607 FICO

I should also note that I just paid off an auto loan last week. That loan was 30 days late 8 times but has been current as of 2/2011. I have another auto loan that was paid as agreed and closed in 2006. 

Moderator Emeritus
llecs
Posts: 32,869
Registered: ‎08-04-2007
Re: Auto Loan after 2 Charge Offs that are 3 years old. 607 FICO

I think a loan is possible. The rate will be higher compared to those baddie-free, and I bet it'll be somewhere in the mid-double digits. I'd aim for a CU for a better rate.

 

If I had that, I would PIF the CCs first. Paying won't help the CO any, but it will improve util and that'll increase your FICO scores. It'll also lower the DTI and that will also improve your odds.

Established Member
bmartinta
Posts: 16
Registered: ‎09-15-2012
Re: Auto Loan after 2 Charge Offs that are 3 years old. 607 FICO

Thanks for the reply. 

 

I have tried to PFD with Cap 1 and they wont budge. They outsource the account to a collection agency, but still own the debt. What really sucks is that my balance is showing double than what it was when I stopped paying. 

 

Should I just ante up and PIF with the Collection Agencies and just move forward? I have plenty of savings to pay these off. What if I got a secured VISA and used the VISA to pay the accounts off and then use my savings to pay off the VISA balance? Or just pay off the accounts and then use my seccured card till tax return comes and try then.

Moderator Emeritus
llecs
Posts: 32,869
Registered: ‎08-04-2007
Re: Auto Loan after 2 Charge Offs that are 3 years old. 607 FICO

bmartinta wrote:

Should I just ante up and PIF with the Collection Agencies and just move forward? I have plenty of savings to pay these off. What if I got a secured VISA and used the VISA to pay the accounts off and then use my savings to pay off the VISA balance? Or just pay off the accounts and then use my seccured card till tax return comes and try then.



Ignore the CAs. For as long as the OC still reports a balance, then all communication, payments, etc., need to go to the OC. I'd PIF with CapOne directly.

 

I don't know if they'll take Visa to pay the Visa/MC. Sometimes they'll push fast payments via Western Union and places like that. I know you can use a CC there in many cases. I'd only consider a secured CC if I needed a CC for mix. Do you have any open CCs now? If not, maybe it'll be beneficial, but I certainly wouldn't use your new card to pay off a debt. No need for the high util. I'd use your savings.

Established Member
bmartinta
Posts: 16
Registered: ‎09-15-2012
Re: Auto Loan after 2 Charge Offs that are 3 years old. 607 FICO

See the thing is that I have tried to pay Cap 1 directly, but they wont take payment. They wisk me away and always transfer me to the CA that handles the account. I have told the CA that I will not deal with them and will only deal with the OC. Id like to resolve these debts in the way that best fits my situation. If I were not trying to shop around for a new vehicle I would simply leave these accounts alone as I have no need for credit at this point in time. I have no other open CC as of right now. The only loans I have are my student loans. 

 

And as for paying the debt off with a new CC I meant a secured card in which I would pay the balance off in full with my savings. That wouldnt up my util. Right now I have roughly $10k sitting in the bank so I might as well put some of it to use for building credit.

 

It is just frustrating knowing that I could easily afford a new car, but in the eyes of a lender they might think otherwise. I was denied a motorcycle loan back in March 2012. I offered 50% downpayment and only wanted a $3k loan. This was with my CU who I financed my current car with. When that happened I started thinking about how much damage these charge offs are doing to my credit potential.