Hello,
I am in my mid-20s and working on making my first car purchase. I am an engineer by trade and have a decent salary (65k gross). I also live at home, and do not have and "official" rent payment (I do help out to the tune of $1000/month). What has held me back from purchasing a car, however, is my credit. While in college, I had a family member open up 3-4 credit cards in my name, max them out, and they ended up charge-offs before I was aware of the situation.
Now, ill admit I have not handled the "fraud" situation correctly to date. I sat on the charge-offs for a year after finding out about them, mainly because I did not have the money to pay them off and didnt want to cause a lot of family drama. I have since decided to pay-off most of the charge offs (roughly 6k to date). The charge-offs I paid had not been reported as a collection, so they are reported as "paid in full, was a charge-off" as of today. I still have a collection that I have set up a payment plan for that is still at around 1,200$. In additional to this I have a medical bill of 700$ in collection.
Additionally, on top of the charge-offs/credit card debt, I have around 30K in student loans, which I have no missed payments on. I did apply for a few forbearances right after graduating, which gave me a few months additional amnesty from paying on the loans while I looked for work.
Before I started to work on my credit at all though, I first shopped for an auto loan at my bank and a dealership, just to gauge where I was at. The answer was not good. At the time, I had a 580 credit score, along with my same salary (65K), and was denied by both places. They listed several reasons in their denial letters, the reasons being my high student loan balances, charge offs, and low credit score, and lack of history. I chalked the majority of the denial up to the outstanding balances I had on the charge-offs, so I decided to try and pay those down before trying again.
Since the first attempt to get approved, I have been able to pay the majority of the charge-offs off, increase my credit score to 620, and get approved for a secure credit card through my bank. I originally planned on working on my credit a little more before trying again, but my current situation is dictating I get a car soon.
Now, the other problem I have is my taste. I believe in buying a quality product, and using it for as long as possible. I have my heart set on a midsize Toyota Tacoma, a newer model at that (2017,2018). Unfortunatly the MRSP on said vehicle is around 30-33k, and im not so sure I can get approved for that high of a loan. I currently don't have a lot of money saved for a down payment, due to my savings going to clear up the debt mentioned above. So I guess ultimately what my question is, do I stand a chance? Has anyone here been able to obtain a loan that high with a score and circumstances similar to mine? I am not opposed to buying a used vehicle, but most of the ones I have found are just as expensive as a brand new one. The terms I had in mind were 60-months, and I have accepted that my interest rate would be around 10%. Im pretty sure I can handle 800$ a month in car payment and insurance.
Thanks in advance,
Golfer
