topic Re: First Time Buyer/ New Credit in Auto Loans

First Time Buyer/ New Credit

Anonymous — Sun, 11 Oct 2015 18:34:17 GMT

Hi everyone!

This place is a lot of help for me.

I need some help/information about car loans.

I moved to the US exactly one year ago.

I opened a checking account with BofA the second day I was here.

I have a full time job, with a montly income of ~2800/mo since Feb 2015.

Opened a credit card with BofA in 09 May 2015. It is a Cash Rewards card with a $500 limit. I have been using it sine day 1 and paying it back right away, carry a small balance, never payed intrest. $39 annual fee, $99 deposit was required.

In august I got an offer from Capitol One with a same $500 limit, but no annual fee or deposit, and free credit score tracking. I took the offer, and been using both cards.

I am in need of a car, so I went to dealers to see what my options are.

Right now, I have NO Credit score according to the pulls they did.

I know about the 6 months before a FICO score actully pops up, so my question is how log do I have to wait for a score to appear for me?

The car is a CPO VW Jetta 2013, with a price of $14,935. I want to put down at least $4000 on it and finance the rest. The price includes taxes and fees, and i have a detailed offer for it.

Yesterday only Santander approved me, with a crazy high intrest rate around 40%... I guess because I have no score at all.

The Capitol One Score Tracker show a score since I opened the account, but that one is only 3 months old. I know it is not the same score but its something.

The BofA account is 6 months old(or 5 depending on how they calculate it).

Is it possible that, if I wait a month or two I will have an actual score, and can finance with a reasonable rate?

Any help will be appreciated!

Thank You!

Re: First Time Buyer/ New Credit

Skye12329 — Sun, 11 Oct 2015 19:40:27 GMT

It's possible to have a score in 1-2 mos. If that's going to be around the time of your 6 mos. The capital one score tracker isnt a real score. It's the same as credit karma. I noticed a trend when we were car shopping that it seems for a used car, a lender would give a higher interest rate vs getting a new car. Personally I would talk to the dealer and compare the used car your looking at and a new car for the monthly payments and the same term you want. Because if the monthly payment would be roughly the same due to the APRs being given. It would make more sense to take the new car. Just my opinion though.

But as mentioned I would wait a month or two to see If you generate a score. You can buy your fico scores vs having the dealer pull your credit. It would avoid the pulls purchasing them.

Re: First Time Buyer/ New Credit

Jpmack29 — Sun, 11 Oct 2015 21:53:34 GMT

40% interest holy crap!!! I dint think they went that high!!

Re: First Time Buyer/ New Credit

bdhu2001 — Sun, 11 Oct 2015 22:01:46 GMT

40% sounds illegal, but even if it not, run. Use public transportation and continue to save money towards your car. In 6 mos you should have a score and be able to get a better deal. If not, save until you can or buy a reliable used car.

Re: First Time Buyer/ New Credit

328James — Sun, 11 Oct 2015 23:34:05 GMT

Please make sure the Jetta you are considering is not part of the recall for the diesel version. If so.........RUN!

Re: First Time Buyer/ New Credit

Dj4Money — Mon, 12 Oct 2015 03:00:16 GMT

Ford Credit, I believe Chrsyler/Dodge, Nissan and Toyota all have First Time Buyer Programs. Some credit unions do as well.

Re: First Time Buyer/ New Credit

lincar66 — Mon, 12 Oct 2015 15:58:30 GMT

Why would you buy a 2013 at that price look into new cars lower apr%

Re: First Time Buyer/ New Credit

Anonymous — Mon, 12 Oct 2015 17:01:51 GMT

Please, please, please do not finance anything at 40% - you will be upside down almost immediately, even with that down payment.

Just wondering, why don't you go to a used car dealership or look online and see what $4K will get you? Even look up to $6-$8K, with 50% down, that might get you a better rate. Where are you looking to buy the car from? I went to Carmax, saw all the financing offers, it wasn't hidden in a backroom with just the sales manager or F&I guy. Build up your profile so you are generating a credit score and then look at an auto loan in a year or so.

Re: First Time Buyer/ New Credit

Anonymous — Wed, 14 Oct 2015 07:52:36 GMT

DavZone,

I moved to the US a little over a year ago too and let me tell you your score can grow pretty fast, you will save a LOT of money by waiting a little longer. Once your oldest account is a year old your score can be high enought to qualify you for the best rates. It'll move FAST. Right no there's no information on you but in a few months there will be and it'll be GOOD information.

So be patient, wait until you not only have a FICO, but you have a good FICO. It won't be THAT long a wait!

My other advice - go join a couple of credit unions. Find out what's popular in your area and join, they may be more willing to work with you.

Re: First Time Buyer/ New Credit

Anonymous — Wed, 14 Oct 2015 07:56:45 GMT

BTW, did you have an Amex in your prior country? If so, Amex will give you a US Amex with the same limit you had there. That really helped me get started. I started with that and the BoA card you have (since changed it to a Travel card, used to have that Cash.) Then a local CU took a chance on me, and then when I had a score I apped the rest. I also got a card from a Canadian bank that operates in the US, they used my Canadian history. See if there are any banks from your country and if they'd use your history from home country to give you a card here. If so it can really help you when first starting out. Look for those things!

Re: First Time Buyer/ New Credit

Anonymous — Fri, 16 Oct 2015 16:17:06 GMT

Thanks everyone for the comments.

The reason why i am looking at a car like this is just the price/value.

A new car would cost me over 22k with the same trim.

With the warranty on CPO cars, the price is a lot better.

Any history from my country is non transferable, only criminal background check was done before I came here. My country does not have a credit score system, or a system like carfax, and insurance history at all.

Right now I had a few appointments with insurance companies and some CUs, to see what we can do.

I have a few pending, and the good news is that none of these were a denial, like the big banks like BofA, Cap1, or VW credit...

I had to send copies of my documents for verification. So now I have to wait.

Insurance was also a tough thing to figure out, every online quote was over $210 a month. I was still willing to pay that for like 6 months, and find a better quote later with history.

Right now I have an offer from State Farm for $150. That sounds good for me.

If i can get financing with a 10% APR for a start, i would take it.

Pay it for like 6 months, or a year, and refinance with a much better rate.

Since june, i am paying over $400 a month for uber and lyft, to get rides to and from work.

I want to put this money into a car, and I think i should be able to get a car with insurance for $400/month.

This is my goal right now.

If i had my own car, it would make my life so much easier.

I know I dont have a FICO score yet, but if Banks do hard pulls on my credit, do they still see my history?

Or the only thing they see is no score, and thats it.

Re: First Time Buyer/ New Credit

mitchblue — Fri, 16 Oct 2015 21:17:59 GMT

@Anonymous wrote:
DavZone,

I moved to the US a little over a year ago too and let me tell you your score can grow pretty fast, you will save a LOT of money by waiting a little longer. Once your oldest account is a year old your score can be high enought to qualify you for the best rates. It'll move FAST. Right no there's no information on you but in a few months there will be and it'll be GOOD information.

So be patient, wait until you not only have a FICO, but you have a good FICO. It won't be THAT long a wait!

My other advice - go join a couple of credit unions. Find out what's popular in your area and join, they may be more willing to work with you.

Agree with this. I'd suspect once things report and you get a score it'd be over 700 to start. And the CU, yes. They usually have better rates..

Re: First Time Buyer/ New Credit

Anonymous — Sat, 17 Oct 2015 03:32:23 GMT

You got your first card in May so you should get a FICO in November which is not far off. My guess is your score will be between 710 and 720 out of the gate. I believe my first score was 711.

I would wait one month if I were you, it is likely to make a difference.

Re: First Time Buyer/ New Credit

Anonymous — Wed, 21 Oct 2015 21:37:29 GMT

Little update.

I went ahead with State Farm and got a good quote for the insurance.

I did an application with their bank, for a car loan.

They requested a copy of DL,SSN and last 2 pay stubs.(1 year in US, 8 months of employment history only and 6 month credit history)

I got approved for $20k, $0 down at 9%@60mo.

They pulled TU score, 4 days after the dealer(at that point it showed no score). Now TU report says 667.

Also got approved for a credit builder VISA with them with an APR18%, $1000 limit, and that is better than both of my other credit cards both at $500 limit with APR22%+.

Now I have 30 days to shop around, or try other places and dealer to see if they can match or lower my APR?

Any suggestion?

Re: First Time Buyer/ New Credit

Anonymous — Wed, 28 Oct 2015 15:25:30 GMT

Good News!!

I went ahead, and found a car, a different Jetta.

2014 SE, 1.8T , it has everything except factory navigation.

16k miles, 12 months old. CPO car, with 4 years or 44k miles BtB warranty.

https://goo.gl/photos/3YM4aYrAzLz9tDBH8

I financed 13k on it, and my 9% APR was lowered to 7% because of the cars age and low miles. No new credit pull was needed.

I think that is a good start.

Re: First Time Buyer/ New Credit

Anonymous — Wed, 28 Oct 2015 15:59:23 GMT

@Anonymous wrote:
Good News!!

I went ahead, and found a car, a different Jetta.
2014 SE, 1.8T , it has everything except factory navigation.
16k miles, 12 months old. CPO car, with 4 years or 44k miles BtB warranty.

https://goo.gl/photos/3YM4aYrAzLz9tDBH8

I financed 13k on it, and my 9% APR was lowered to 7% because of the cars age and low miles. No new credit pull was needed.

I think that is a good start.

Absolutely yes, that is an Ok finance ratefor your situation and you got a very good car with low miles, and a warranty.

You did very well!

Congrats!

Now that you have CCs and an auto loan, your scores should grow very soon.

Re: First Time Buyer/ New Credit

Remember0 — Sun, 01 Nov 2015 00:05:13 GMT

Congrats on the purchase. Great little car there, it's what I drive myself.

In six (or even three) months, check what your EQ FICO is. If it's 680+ (which it should be, just keep util low), I'd look into even refi'ing the loan with DCU who should offer you 1.99% with DD and 2.49% without DD.