topic Re: Income verification in Auto Loans

Income verification

Smarter — Mon, 11 May 2009 21:13:16 GMT

I am wondering if Cap 1 or Roadloans always want pay stubs before approval. My scores are about 100 points higher than my husband's (TU 680,EQ 682), but I am not working right now--we just moved to a new state for his job. He has a 6 figure income--I have zilch! I need a second car so I can go to work! Has anyone been approved and not had to submit pay stubs?

I have been working on credit repair for the last year or so--Had my husband up to 620 and then an old collection hit. I am trying to wait out SOL. Thanks for any help!

Re: Income verification

Anonymous — Mon, 11 May 2009 22:25:20 GMT

MOST places are going to require paystubs. they may allow you to be on the loan and get a better rate that way and just use his income, but It probably won;t change the rate anyways. Without income, a FICO doesn't do much for you.

Re: Income verification

Anonymous — Tue, 12 May 2009 02:28:12 GMT

@Anonymous wrote:
MOST places are going to require paystubs. they may allow you to be on the loan and get a better rate that way and just use his income, but It probably won;t change the rate anyways. Without income, a FICO doesn't do much for you.

when using someon's income does the credit score of that person decrease you chances of getting approved?

Re: Income verification

Anonymous — Tue, 12 May 2009 03:16:29 GMT

First off, you usually have to be ont he loan to count income. In they heday of cheap lending they sometimes would qualify loans based upon "household income" and 1 person's credit but I think that is over now. As far as how they count two income with differnet scores it varies. Some will go by the lowest score and some will go by whoever is listed as primary to determine eligibility and interest rate.

Re: Income verification

Anonymous — Tue, 12 May 2009 03:54:02 GMT

@Anonymous wrote:
First off, you usually have to be ont he loan to count income. In they heday of cheap lending they sometimes would qualify loans based upon "household income" and 1 person's credit but I think that is over now. As far as how they count two income with differnet scores it varies. Some will go by the lowest score and some will go by whoever is listed as primary to determine eligibility and interest rate.

so with that being said how would cap 1 and roadlons go about that?

Re: Income verification

Anonymous — Tue, 12 May 2009 15:10:24 GMT

I have never had to verify income when purchasing a car.....for which I have purchased 4 since 2005 with the last one in August of 2008. My FICO was enough....in 2005 it was only around 620 when I bought the first one.

Re: Income verification

203bravo — Tue, 12 May 2009 18:06:18 GMT

I've also never shown up with check stubs. Maybe it's the subprime lenders that are requiring that. Remember that if you have a decent FICO (which sounds like you do). Then they are holding the title to the auto as collateral for this loan.

Re: Income verification

Smarter — Tue, 12 May 2009 18:27:32 GMT

Thanks for the replies. I hadn't thought about the car being collateral....

Re: Income verification

MattH — Thu, 14 May 2009 11:05:32 GMT

In general, for credit purposes (whether for auto loans or mortgages) when the member of a couple with more income has the lower credit score they cannot count the higher income while ignoring the lower score or vice versa. An individual can apply based on his or her own income, debts, and scores, or a couple can apply based on their combined income, debts, and scores. The one common exception that I know about is some credit card applications ask for total household income.

I will note that in my own experience the only time I've ever been asked for verification of income was for the mortgage on my residence, every other lender has approved me based on my credit history and what I wrote on the application form. When I bought my current car I was approved the same day. However, I have not applied for any credit in several years, so perhaps in the current climate income verification might be more common than it used to be, I dunno.

Re: Income verification

MattH — Thu, 14 May 2009 11:13:14 GMT

@Smarter wrote:
Thanks for the replies. I hadn't thought about the car being collateral....

Yes, a car is collateral. Possibly part of the reason no auto lender has ever asked me for verification of income was because my trade in plus down payment were always at least 25% of the total purchase price; I gather the bigger the down payment the safer they feel.

Edited to add: if your husband has a six-figure income then I strongly recommend this be the last car loan you ever have in your lives, at that income level you should be able to find room in your budget for paying off all non-mortage debt pretty quickly. Keep this car until it falls apart, so that once the loan is paid off you can immediately open a savings account where you put a monthly amount equal to the loan payment towards its replacement!

Message Edited by MattH on 05-14-2009 07:13 AM

Re: Income verification

Smarter — Thu, 14 May 2009 15:15:59 GMT

Thanks MattH--you are so right! The trouble is I have 4 kids in college out of state and a total of 4 vehicles already (all paid for). My car insurance is horrendous.

We got into some trouble a few years back when my husband lost his job--forclosure and lots of late payments and medical collections. We have made great strides (thanks to this board) and are dealing with our finances in a much better way. I feel like we are on the right track--4 years or so and most of the negatives will drop off.

It is tough to save with all of the college expenses. I will say that we have very little debt at this time and all of the negatives are paid (from before I knew about PFD's!) There is light at the end of the tunnel....!

Re: Income verification

LouMinotti — Thu, 21 May 2009 03:03:44 GMT

I am self employed and I was sure that I was going to be asked for Income verification when I purchased my car this week, but I wasn't. My TU is 670 and EQ is 650 (lower because a good line of credit from HSBC doesn't /won't report this particular account to EQ for some reason). In any case I have no "baddies" but my util is 75 percent which keeps my score down. The financer never asked for it though, he said my credit was "fine". He said since I have lived in the same place for 11 years , same employment for 11 years, and a previous car loan paid in full never late plus a note loan PIF never late and the 4k down was a safe risk for the bank. I still can't believe it actually, I just thought these days no bets are safe to banks. When I went to get insurance for the car, my agent switched me to Allstate and got me a better rate for my new car plus my old car based on my credit as well. He said my credit was very good. He said 60 percent people in this nation have a score of less than 600, I wasn't too sure about that, but then again, he's looking at this stuff al the time; everyone with a car has to be insured. Curious, that. . .