Approval with current collections?

[speckled]

Right now I'm sitting at:
Ex 616
Eq 632
Tu 634

I have two open collection accounts, just paid off 3. Lots of old derogs with $0 balance. Credit util is 8% This would be my first auto loan.

Are the collections going to ruin my chances?

[Anonymous]

Ive been approved with one collection which is now paid off but still on my report... Depends on the bank/card.

[Anonymous]

What kind of collection's are they?

It seem's more often than not auto lender's don't pay a ton of attention to older collection's, and more specifically medical collection's when decisioning approvals. Sometime's collections can become issues if they are very recent and are non-medical.

Are those your Auto-Ehanced scores or just traditional FICO scores? Most of the auto lender's, especially captive lender's like Ally, Well's Fargo, Etc, use auto-enhanced scores for decisioning.

[speckled]

One is an old credit card, one is a utility bill. The scores listed are just my fico8 scores. I didn't think I'd have auto enhanced scores since I haven't had an auto loan before.

[Anonymous]

You will have an auto-enhanced score regardless of having any auto loan history. If you have enough credit to generate a traditional Fico score, you will have an auto enhanced score.

The Fico Auto score is simply a different scoring model that is more geared toward's auto lending.

An Auto-Enhanced score could be either lower or higher than your traditional FICO score, it is based on a 350-900 scale. You can obtain your auto scores on this website by purchasing your credit report, this site gives you many many different scoring models in additional to your traditional FICO score. For example if you were to purchase your TU report, you will see your Mortgage score, Auto score, Bancard score, and so on. There are multiple different Auto scores, for exmaple TU has auto 04, auto 08, and auto 09.

Do keep in mind, that not ALL auto lender's use auto scores, some use other scores to decision approvals.

[speckled]

Good info, thank you! I knew there were lots of different scoring models, but thought auto enhanced scores went based on prev auto loan payment history.

I will definitely purchase a copy of my report. I'm hoping for some changes to be reported after the first of the month.

[Anonymous]

No problem!

Yes, without auto history you will still have an auto score. I have personally seen folk's with 800+ auto-enhanced scores without a single auto tradeline on their credit bureau.

I would suggest trying Capital One's pre-approval and see what kind of rate they offer you, it is a soft pull so it can give you a good idea of what to expect.

Getting your scores in the mid to upper 600 range should net you a pretty decent APR, especially if you establish a relationship with NFCU/DCU/Penfed, they seem to all offer pretty good interest rates with less than perfect scores.

I also recommend putting as much money down as possible. Many people don't like to put money down but it is really important to do so..I would recommend at least 10%-20% down for many reasons, preventing inequity, getting better interest rates, and avoiding the necessity to have GAP protection, in addition if you ever got into a pinch and needed to lose your car payment, being in line with equity will allow you to sell your car without having to come out of pocket to cover the payoff.