Auto loan thoughts

[Anonymous]

Hi!

Just want to say that i think this forum is great!!  Full of great information and lots of helpful members!!

So here is some background info:

We are in the market for a new car.  The hubs and I haven't had a car payment in about 12 years.  Our kids are getting older and we need a new vehicle for our growing family. 

About us:

Hubs:

At his city government job for almost 20 years and his annual salary is about $54,000. Not sure of his exact credit score but Discover and Credit Karma have him around 705.  

Me:

At my federal government job for almost 19 years and my annual salary is about $89,000.  My credit score is around 640 according to Discover and Credit Karma.  

We had had some credit difficulties back in 2009/2010.  We fell behind on our mortgage in 2013 but have been on time every month since May 2014.  He got some credit cards and has 3 cards totaling about $23,000 in credit lines and we have about 24% utilization but are planning on paying that down as fast as we can. I am an authorized user on these cards and they appear on my credit report as well.

Back in 2009, I let a credit card get charged off, I was sued and had a lien against me, which is currently being collected by garnishment through payroll deductions (we were this close to paying off but they put the order through before we got the chance to pay it off ☹️).   That garnishment should be complete by July.  We have been responsible with our credit since the hubs starting rebuilding our credit. 

We have now freed up another $1100.00 (total $2300.00 available after our regular monthly bills are paid) a month in income and we want to purchase a new car.  We have 2 local credit unions we belong to and are considering Penfed as a possible application.  We are not in a huge hurry to buy (60-90 days is our target).  We are thinking just to use the hubs' credit for the purchase even though I will be the primary driver.

Some questions:

Is using only the hubs' credit and my income as additional income the right move?

Should we wait until the garnishment is paid in full (wondering if we would have to clarify this deduction on my pay stub)?

What do you think our approval chances are?

Any other thoughts are welcome.  Thanks for your time and attention.

Em

[Anonymous]

Hello and welcome to the board.  This is a great place for information and to learn to rebuild and get good deals on credit.

You have a few things to tackle in my opinion. First and foremost you should have your and your husbands actual FICO scores, I believe you can get a trial here cheap and get the actual auto scores which is what you need to determine where you stand.  Credit Karma is useless.  We have been rebuilding since 2014 and paying for Myfico subscriptions for myself and my wife have been invaluable to our full understanding of where we stand, how our scores are impacted by our credit utiization etc.  Knowing my scores at all times and getting alerts everytime something happens with our credit reports gives us piece of mind also.  We went for years not wanting to know because we had a forclosure and gave up on the idea of having good credit, since I began coming here I learned I worried and wasted years living in the dark when it came to my credit.

I would wait until the garnishement is paid before I would try for a car loan, I am sure you can get qualified today somewhere but the question is always about the terms, car interest adds up quickly so every point counts.  Happy to hear your already a member of Penfed, they are great, if you can get into NFCU also they are an excellent option also, in my experience better for those of us with a few bumps and bruises on our credit reports.

When it comes to applying you should let the scores and debt to income ratio determine that.  You can certainly have him do it on his own if the debt to income works.  On car loans you can only count the income of the folks on the credit application (unlike CC applications).    I would probably apply with both of you first and see how it comes back, if your working with a credit union you can probably ask them if you are helping or hurting the application.  My guess is it will be fine with both once the garnishment is done assuming you don't have other recent baddies.  Having a positive installment account is important for scores so ideally you both want to be on the loan.  

Might want to check your actual scores, see how the garnishment is being reported and then post that information and we might be able to give you a more precise answer.  Its unfortunate that CC went to garnishment, that one might stick with you for a long time.  We have been dealing with an IRS lien for years and its a pain in the butt.  Happily now that its paid we can have it withdrawn so it will be erased from history, can't wait.  Might want to check with the rebuilding or collections forums to see if they have advice on garnishments.

Sorry for the long response

[Anonymous]

Workingfor850, thank you for your help and encouragement. I really appreciate that.

Here is the strange thing about the lien, it has NEVER appeared on any of my credit reports.  

I think waiting will be wise.  I get free credit monitoring (due to government hacks) and know that I am due to have 5 negatives drop off by June this year across all three reports.  In the meantime, I will get some credit scores and where we officially are.

Thanks again!

Em

[Anonymous]

---

@Anonymous wrote:

Workingfor850, thank you for your help and encouragement. I really appreciate that.

Here is the strange thing about the lien, it has NEVER appeared on any of my credit reports.  

I think waiting will be wise.  I get free credit monitoring (due to government hacks) and know that I am due to have 5 negatives drop off by June this year across all three reports.  In the meantime, I will get some credit scores and where we officially are.

Thanks again!

Em

---

That is great that it hasn't shown on any credit report.  I agree waiting for the baddies to fall off is a smart idea. You will likely get a bump in score when they fall off and of course less baddies is always better regardless of score.   Best of luck and let us know how things work out.