topic Re: Really worried I can't get financing.....(UPDATED) in Auto Loans

Really worried I can't get financing.....

Anonymous — Tue, 05 May 2009 18:39:04 GMT

Hi everyone. I am trying to obtain a $35k auto loan for a new car but my score is sitting at a 630 right now. What do you think my chances of getting approved are?

I've had 3-4 different auto loans in the past ranging from $7k - $26k....always paid on time.
my credit report is crystal clear for the past 3 years and all of my credit card balances are <5% util. and get paid off every month.
I have lived at the same residence for past 3 years, I have worked at the same place for the past 3 years.
I make $70k annually.
My debt to income is about 35%.

Please don't bash me....I know that no one needs a new car. I have no family or outside responsibilities so I would like to purchase my dream car. I've worked really hard to rebuild my credit in the past 3 years and it is taking forever to go up. My FICO started in the 400s so this has been a long road ........

Message Edited by babyjulie83 on 05-05-2009 11:38 AM

Message Edited by babyjulie83 on 05-05-2009 11:39 AM

Re: Really worried I can't get financing.....

moondog7324 — Tue, 05 May 2009 19:49:08 GMT

You know what you can afford, and what your wants are. What are the negs holding your score down? Can you wait 3 months to try to clear some things up? What is this dream car?

Message Edited by moondog7324 on 05-05-2009 12:49 PM

Re: Really worried I can't get financing.....

Anonymous — Tue, 05 May 2009 20:11:59 GMT

@moondog7324 wrote:
You know what you can afford, and what your wants are. What are the negs holding your score down? Can you wait 3 months to try to clear some things up? What is this dream car?
Message Edited by moondog7324 on 05-05-2009 12:49 PM

I'm not exactly sure what is bringing down my score. I had about 3 accounts in collection from about 4 years ago that I paid off after they were sent to collections....they totaled to about $2k. I have student loans but they get paid on time every month. I honestly don't know what is bringing my score down....I guess those old collection accounts still are a little bit. ?

The dream car is the 2010 Camaro. The car is being built right now and it will probably be another month before I actually start trying to get a loan. Even if I waited a few more months to try and boost my credit score I don't know what I would do to boost it.....maybe it just needs time....my score just sits there at a stagnant 630.

One thing I forgot that is bringing down my score is a chargeoff from Macy's. Back when I was in college I was stupid and did not pay my bill. It is showing up on my credit report as still being owned by Macy's and is only a balance of $306. I tried to get them to do a PFD but they refused several times and told me that they don't do any PFDs. I have no problem just paying it off but i'm afraid if I pay it that my score will drop.....and God knows I don't need my already-low score to drop.

Re: Really worried I can't get financing.....

Anonymous — Tue, 05 May 2009 20:38:06 GMT

Hi... I would think you can find financing because 630 is not a bad score. For sure, you can

get approved with Capital One, Roadloans, Drive, etc. Have you tried your own bank or

credit union yet as well? Might want to start there and see how you make out and then

go on to some of the others I mentioned above. Good luck on the Camaro... that is going to

be a terrific car... love the looks of it.

Re: Really worried I can't get financing.....

Anonymous — Tue, 05 May 2009 22:01:48 GMT

babyjulie -

You are in luck if one of your baddies is a low dollar Macy's charge off.

Macy's has a "Reinstatement" program offered through their recovery department. Essentially, when you pay the charge off amount in full, they will update that item to remove the derogatory items and they will issue you a new account with a CL in the amount you paid.

This is something you could have taken care of in the next 30 to 45 days....and for around $300 it a great investment in your credit.

Re: Really worried I can't get financing.....

Anonymous — Tue, 05 May 2009 22:17:59 GMT

@Anonymous wrote:
babyjulie -

You are in luck if one of your baddies is a low dollar Macy's charge off.

Macy's has a "Reinstatement" program offered through their recovery department. Essentially, when you pay the charge off amount in full, they will update that item to remove the derogatory items and they will issue you a new account with a CL in the amount you paid.

This is something you could have taken care of in the next 30 to 45 days....and for around $300 it a great investment in your credit.

A reinstatement program sounds fantastic and I would do it in a heartbeat. There's no possible way that this could lessen my credit score.....I don't think so anyways.

The problem is that I have called Macy's collection department several times and several different people in that department have told me that there is nothing I can do but pay it off and that then they will report it as paid after collections....which won't help me. So I don't know what to do except to keep calling and hopefully get a person who will do this reinstatement program with me.

I guess I would need to get something in writing that says i'll be reinstated after paying the full balance?

Re: Really worried I can't get financing.....

Anonymous — Wed, 06 May 2009 11:44:47 GMT

Call Macy's and ask for their "recovery department." Then tell them you are interested in the "reinstatement program." Use these words, don't speak about settlement, collections or PFD.

Macy's: 800-543-9617 (Recovery Services)

Let us know how you come out on this.

Message Edited by txjohn on 05-06-2009 04:44 AM

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 06 May 2009 14:21:40 GMT

Ok so I called and spoke to someone in the recovery department this morning. I asked her to tell me about the reinstatement program and how it works. She said the fastest way to take care of it is to go to a Macy's store and pay the balance at one of the cashier stations. She said once that was paid that they would immediately send out a new Macy's card with a limit identical to the amount I paid.

She also told me that the old chargeoff account will show up on my credit report as 'paid in full after chargeoff' and that the new account would be opened as of the day my balance was paid. She wasn't sure if an inquiry would take place or not.

So I am going to take part in this reinstatement program for sure....my question is should I do it before or after I get financing for my car? With a score of 630 I can't bear for it to go down at all......

I'm not sure how participating in this reinstatement program will affect my score....it seems like all it would do is drop my score b/c of a possible new inquiry and a recently opened credit line. Having the chargeoff account as paid after chargeoff won't help my score b/c the damage was already done when it was charged off.

Any ideas or advice guys? I am going to do it but if it will probably drop my credit score then I will wait until after the car financing.......credit scores are like a rubix cube.....

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 06 May 2009 14:53:37 GMT

Hmmmm.

You might need to hold off. Macy's is going to do a hard pull, even though you are guaranteed the new account after you pay the old. You also will end up with a new account. And you will have a more recent "Date Reported" on the Macy's. All of these can reduce your FICO short term.

However, my understanding was that they removed the old derogs like a GW act. But maybe the info I was relying on is not quite accurate. I know they have a reinstatement program, but I was not aware that the derog would be changed to "paid after CO"

The one positive from the paid after CO, is that if this account is affecting your CC utilization, this would be reduced, but I doubt this is enough to offset the inquiry, new account and updated dated reported.

NEW QUESTION: How much are paying down on the new loan?

Message Edited by txjohn on 05-06-2009 07:53 AM

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 06 May 2009 15:50:44 GMT

@Anonymous wrote:
Hmmmm.

You might need to hold off. Macy's is going to do a hard pull, even though you are guaranteed the new account after you pay the old. You also will end up with a new account. And you will have a more recent "Date Reported" on the Macy's. All of these can reduce your FICO short term.

However, my understanding was that they removed the old derogs like a GW act. But maybe the info I was relying on is not quite accurate. I know they have a reinstatement program, but I was not aware that the derog would be changed to "paid after CO"

The one positive from the paid after CO, is that if this account is affecting your CC utilization, this would be reduced, but I doubt this is enough to offset the inquiry, new account and updated dated reported.

NEW QUESTION: How much are paying down on the new loan?
Message Edited by txjohn on 05-06-2009 07:53 AM

Yeah, if I knew for sure they would remove the derogatory Macy's account then I think it would be worth it to take care of before the car financing....but this just isn't something I'll know for sure until I do it.

I do not have very much to put down....worst case senario, I only have about $3k to put down (I'm not exactly sure when the car will come in....I preordered). I did have more saved up but I ran into some medical problems in early January and had to dish out some money for that. I really wish I had more to put down. I would just wait maybe until the end of the year but there is no way the car I have now will make it until then. Right now I drive a 99 Buick regal that is in the repair shop constantly.

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 06 May 2009 16:38:54 GMT

Who are you applying with on your loan?

Message Edited by txjohn on 05-06-2009 09:38 AM

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 06 May 2009 16:50:15 GMT

@Anonymous wrote:
Who are you applying with on your loan?
Message Edited by txjohn on 05-06-2009 09:38 AM

I haven't really decided yet....any suggestions?

I joined the Credit Union of Texas a few months ago.....think i'll apply with them.

I have banked at BOA for several years so I think i'll apply with them.

I have been insured with State Farm for 10 years and so I may apply with State Farm Bank.

Then as a last resort I was going to see what financing the dealership can get me.

Isn't it true that I can make several 'auto loan' inquiries and as long as their within a 14 day period that they will only count as one inquiry on my credit report? .......or did I dream that?

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 06 May 2009 17:05:31 GMT

@Anonymous wrote:
@Anonymous wrote:
Who are you applying with on your loan?
Message Edited by txjohn on 05-06-2009 09:38 AM

I haven't really decided yet....any suggestions?

I joined the Credit Union of Texas a few months ago.....think i'll apply with them.
I have banked at BOA for several years so I think i'll apply with them.
I have been insured with State Farm for 10 years and so I may apply with State Farm Bank.
Then as a last resort I was going to see what financing the dealership can get me.

Isn't it true that I can make several 'auto loan' inquiries and as long as their within a 14 day period that they will only count as one inquiry on my credit report? .......or did I dream that?

That's what FICO tells us

Credit Union, Dealer and E-loan/LendingTree are probably going to be the ones who get you taken care of.

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 27 May 2009 01:06:17 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
Who are you applying with on your loan?
Message Edited by txjohn on 05-06-2009 09:38 AM

I haven't really decided yet....any suggestions?

I joined the Credit Union of Texas a few months ago.....think i'll apply with them.
I have banked at BOA for several years so I think i'll apply with them.
I have been insured with State Farm for 10 years and so I may apply with State Farm Bank.
Then as a last resort I was going to see what financing the dealership can get me.

Isn't it true that I can make several 'auto loan' inquiries and as long as their within a 14 day period that they will only count as one inquiry on my credit report? .......or did I dream that?

That's what FICO tells us

Credit Union, Dealer and E-loan/LendingTree are probably going to be the ones who get you taken care of.

So my beautiful dream car is on it's way here i'm am desperately trying to get financing. Total price of the car (incl tt&l) is $40k.....I only have $4k to put down. I'm not sure what my experian or TU FICO score is but I know my equifax FICO is a 650.

Ok so I applied with State Farm....that was a joke and I probably shouldn't have...they denied me all together.

I also applied online with Wells Fargo and BoA and they both said no.

I applied with credit union of TX and they would only loan me $20k at 6.45%

I applied online with Capital One blank check....they approved me online for only $30k at 9.20%.

I called Capital One to see if I could get them to increase the amount to the needed $36k but they would not. So everyone wish me luck b/c if the dealership can't get me financed then I will be leaving the car at the dealership. GMAC may be my best friend at this point.

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 27 May 2009 01:58:21 GMT

Not really bashing just observing:

I think someone who made strides in 3 years recovering/improving their credit should have held out a little longer to buy their dream car.

I think someone who makes 70K a year and who is buying their "dream car" should have had more of a downpayment saved up

I think ANYONE buying a "dream car," not a "needs car" should be willing to put up more then 10% of the transaction, more close to 50%, at least 25%. By definition dream cars are huge expensive dreams.

I think anyone walking into a $780 month car payment in this economy needs to re-examine their finances, job stability, and economic reality around them before signing up to what some other people write a check for in that amount they call "mortgage payment" for 60 months.

To be quite honest if you made 70K a year and have a utilization as low as you claim, I do not see the reason you do not simply wait 6-10 months and put 15K-25K down on the car

The dealership financing will probably get you financed. Understand that every dollar you but down will help ensure financing. BTW what kind of car is it?

But I am going to be honest:

70K a year minus 20% for state/federal taxes (just a rough guess)=56K

Lets say the 35% Util is off the 56K=36,400 left

780 car payment plus 150 for insurance=930*12=11160

Which leaves you on a 70K a year income with 550 week to live on. With no idea of what your other actual bills and standard of living, standard of savings is.

Message Edited by usmc58555 on 05-26-2009 06:58 PM

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 27 May 2009 03:15:50 GMT

@Anonymous wrote:
Not really bashing just observing:

I think someone who made strides in 3 years recovering/improving their credit should have held out a little longer to buy their dream car.

I think someone who makes 70K a year and who is buying their "dream car" should have had more of a downpayment saved up

I think ANYONE buying a "dream car," not a "needs car" should be willing to put up more then 10% of the transaction, more close to 50%, at least 25%. By definition dream cars are huge expensive dreams.

I think anyone walking into a $780 month car payment in this economy needs to re-examine their finances, job stability, and economic reality around them before signing up to what some other people write a check for in that amount they call "mortgage payment" for 60 months.

To be quite honest if you made 70K a year and have a utilization as low as you claim, I do not see the reason you do not simply wait 6-10 months and put 15K-25K down on the car

The dealership financing will probably get you financed. Understand that every dollar you but down will help ensure financing. BTW what kind of car is it?

But I am going to be honest:
70K a year minus 20% for state/federal taxes (just a rough guess)=56K

Lets say the 35% Util is off the 56K=36,400 left

780 car payment plus 150 for insurance=930*12=11160

Which leaves you on a 70K a year income with 550 week to live on. With no idea of what your other actual bills and standard of living, standard of savings is.
Message Edited by usmc58555 on 05-26-2009 06:58 PM

I could hold out longer to buy it but my current car is on it's last legs...it's 10 years old.

I have only been out of college for 2 1/2 years and since then I have been paying off old debts I neglected while I was in college. Otherwise I would have had more money saved up.....that and when I first got out of college I was only making $48k.

$780 is definately a large payment, and I doubt very many people would ever think a payment this large is ok. I have a stable job in accounting and the job field for accounting is actually pretty stable still. I would put it towards a mortgage payment instead but i'm actually too scared to buy a house right now. I'm single and don't really know where my life will take me....maybe I will relocate. I'd like to wait until I get married before purchasing a house (no marriage isn't on the table right now).

I may have to wait 6-10 more months to purchase a car. I pre-ordered this car (2010 Camaro) but if financing doesn't come through or it comes through with some outrageous apr then I may have to wait another year. I'm a little afraid to wait with GM in the shape it's in, but i'm sure they'll eventually pull through.

I don't take your comments as bashing, they are constructive. I know there are better things I could spend my money on. After all, a car is a depreciating item. I just thought that now was the time to get the car I wanted, while I don't have a family or kids or any outside responsibilities. I thought that if I didn't get it now, that i'll probably be 50 before I have the chance again. After all, with kids there are tons of added costs not to mention college funds.

Here is a basic breakdown of my monthly activity....any additional comments are appreciated...

5812 monthly gross

-464 401K (8% of gross pay)

-100 contrib. to FSA - medical fund

-400 approx med & ss taxes

-700 approx fed w/h

--------------

4181 monthly net

-1000 rent

-150 avg utilities

-70 current insurance cost for current car and renters insurance, plus some extra life insurance.

-50 cell phone bill

-250 groceries

-200 clothes (I usually don't spend this every month, if I don't I stick it into savings)

-250 student loan payment

-120 gas

-250 eating out / entertainment

-850 put in savings account

-------------

958 left

-100 added insurance cost if new car purchased

------------

858 left for new car payment.

Message Edited by babyjulie83 on 05-26-2009 08:05 PM

Message Edited by babyjulie83 on 05-26-2009 08:15 PM

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 27 May 2009 03:14:25 GMT

@Anonymous wrote:
I don't take your comments as bashing, they are constructive. I know there are better things I could spend my money on. After all, a car is a depreciating item. I just thought that now was the time to get the car I wanted, while I don't have a family or kids or any outside responsibilities. I thought that if I didn't get it now, that i'll probably be 50 before I have the change again. After all, with kids there are tons of added costs not to mention college funds.

1- I am surprised a dealership let you order a car without an expectation of assured financing.

2- AT NO POINT DID I STATE YOU SHOULD NOT BE SPENDING MONEY ON THIS CAR. That's your decision.

I did state that when buying a dream anything, CAR, BIG SCREEN TV, COMPUTER SYSTEM, KITCHENWARE, VITAMIX BLENDER, you would be better served to not finance the bulk of its "dream" price.

3. And this is where I do question your resolve, motive, and sensibility of this decision: This thread started at the beginning of the month. By your own admission you have about $2,500 a month in discretionary unallocated money. Your 4,000 downpayment should have grown to 6,500. Add a $3,500 hold check to the dealership, written now, cashed when good in 30 days, and you should be at the $30,000 you have already been approved for. (Although 10K down on a 40K transaction should get you dealer financing.)

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 27 May 2009 03:21:52 GMT

@Anonymous wrote:
@Anonymous wrote:
I don't take your comments as bashing, they are constructive. I know there are better things I could spend my money on. After all, a car is a depreciating item. I just thought that now was the time to get the car I wanted, while I don't have a family or kids or any outside responsibilities. I thought that if I didn't get it now, that i'll probably be 50 before I have the change again. After all, with kids there are tons of added costs not to mention college funds.

1- I am surprised a dealership let you order a car without an expectation of assured financing.

2- AT NO POINT DID I STATE YOU SHOULD NOT BE SPENDING MONEY ON THIS CAR. That's your decision.

I did state that when buying a dream anything, CAR, BIG SCREEN TV, COMPUTER SYSTEM, KITCHENWARE, VITAMIX BLENDER, you would be better served to not finance the bulk of its "dream" price.

3. And this is where I do question your resolve, motive, and sensibility of this decision: This thread started at the beginning of the month. By your own admission you have about $2,500 a month in discretionary unallocated money. Your 4,000 downpayment should have grown to 6,500. Add a $3,500 hold check to the dealership, written now, cashed when good in 30 days, and you should be at the $30,000 you have already been approved for. (Although 10K down on a 40K transaction should get you dealer financing.)

1. the dealership told me that we wouldn't do any type of financing until the car was at least in transit on it's way to the dealership. Probably because they won't have too much trouble selling the car to another person.

2. yeah I didnt' mean to imply that you said that......

3. I did have $2500 but I put it somewhere else. My elderly father needed dentures badly so I helped him pay for them. I didn't know dealerships did hold checks. I could do that.

Thanks for your help.

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 27 May 2009 03:37:04 GMT

@Anonymous wrote:
1. the dealership told me that we wouldn't do any type of financing until the car was at least in transit on it's way to the dealership. Probably because they won't have too much trouble selling the car to another person.

Thanks for your help.

WOW- really? I mean they didn't do any Finance Mock ups, run maybe one credit score to see about it? WOW. That is just not how I am familiar with a dealership doing businees as most GMs use the "if they had wanted that particular car on their lot they would have ordered it already" philosophy." Did they take a deposit you may "lose?" They really did not check your credit and ordered a $38,000 vehicle....unbelievable.

And yeah ask them if they accept a HOLD CHECK. Usually what a hold check is is you write check that they agree to hold for a fixed time usually no more than 30 days. You can eithe rocme in and pay the check off or they cash it anyway in 30 days. This allows you to take advantage of say a bonus check or additional pay days, something you know you are getting in the immediate future.

They may also allow you to charge a few thousand dollars of the vehicle cost as well. Usually not more than a thousand or two as the cc fees cut into the transaction profit margin.

EDITED TO EXPLAIN: GM as in General Manager, also known as DEALER PRINCIPAL the person who approves the running of the store.

As I used to explain to customers who were upset they had to order their cars: "If we had thought that there would be a huge demand for blue with pink polka dots we would have ordered a few. Thats why you see a lot of white, black, and red.

Message Edited by usmc58555 on 05-26-2009 08:37 PM

Re: Really worried I can't get financing.....(UPDATED)

Anonymous — Wed, 27 May 2009 19:15:30 GMT

Ordered my Camaro in April and I was told the same thing. No finance stuff done until the car is in transit. We put a $1,000 deposit down.