Can I get financed?

Anonymous · ‎07-20-2015

(Originally posted in the rebuilding credit but with some modifications)
Some advice on getting a car loan? Here's the back story:

Recently totaled my vehicle. I was upside down on the loan. I owe roughly $4100 on the car (Credit Acceptance loan). I have yet to see what I will get back from the insurance company. When I look up KBB value its telling me around $3500. I also purchased the Gap insurance when the car was purchased back in 2011. The car's final payoff date was April 2016. I absolutely need to get another car. My credit is subprime. I need a seven passenger vehicle as I have 4 kiddos and would also like to get something with AWD/4WD because we live in NE USA and winters are brutal. Me and DH have two vehicles. His is paid. He also has a five passenger vehicle so I absolutely need to get a family car this time around that will accomodate us all safely in one vehicle.

I started to look at my credit since this has happened. I know that I can only qualify for a subprime auto loan because my credit is so poor. I checked my Equifax FICO through this site and its telling me 556. So far I've checked my free credit report and tried to clean them up a bit. I did dispute a debt on my TU that was way past its time (it was from back in 2001 and it has since been paid since 2007.) But all of the rest is pretty much my problem at this point. Here's whats negative on my report:

Capital One Card-- Charged off and sent to Calvary Portfolio $1914
Credit One Bank Card-- Charged off and sent to LVNV Funding $588
Enhance Recovery Corp for Sprint $614

I also have a repossession from Santander that was sold off to ? that is scheduled to come off of my report November 2017. I'm not sure if its worth it at this point to pay it off or to just let it roll off next year? Its roughly $2500. I also have a debt from a dentist office in the amount of $99 that is scheduled to come off in November 2015 (not that its really affecting my score that much.) I have no open credit cards. The only thing positive on my account are my student loans (11K) that I'm in deferment with.

I can not take the money and purchase another car as I have to pay Credit Acceptance. I have a $1500 down payment. No its not an option to only run with one car. No its not an option to go buy a beater and suck it up. After the accident I was in, I couldn't do that psychologically. I know I'm going to eat another 19% interest loan, but I'm not sure what else to do at this point. Can I even get financed? I feel like I've got one shot. Go to one dealer and pray for a loan.

Oh and I do have a full time job making roughly 50K per year. I've been there since February and have a slight gap in my employment history (1 year) that I took off to finish school. I was at the same company previously for 8 years then took a year off and was rehired. I am currently living with family and really have no bills except my car loan, insurance, and a few other things but totalling less than $500 monthly.

StartingOver10 · ‎07-20-2015

I am going to ask the question that everyone is thinking right now: If your income is $50k and you have no monthly bills except for the $500, where is the rest of the money from your income going?

Right now you have only CO's and collections on your account, except for the repo. According to your post, there is not one positive tradeline, either open or closed on your CR to show the new lender your ability and desire to pay any loan.

Best thing to do is work up a realistic budget to see what you can afford now. You would be better off getting a cash vehicle while you work on your credit. It may not take as long as you think to get your credit items fixed. Vist the rebuilding forum to see what you can do to bump your score up to over 600. It might be as simple as getting a secured credit card and letting it report a few months. Put yourself in the best possible position before you attempt to finance another vehicle. Otherwise you will end up with another high monthly payment and nothing to show for it.

The last thing you need is a vehicle with a large payment and with your description of the vehicle you want it is bound to have a large payment (if you finance any part of it).

Anonymous · ‎07-20-2015

@StartingOver10 wrote:
I am going to ask the question that everyone is thinking right now: If your income is $50k and you have no monthly bills except for the $500, where is the rest of the money from your income going?

50K is gross, not net. The $500 is in addition to the car payment and insurance (which is about another $800). Plus I pay my own health insurance/taxes out of the 50K and I have 6 mouths to feed.

Right now you have only CO's and collections on your account, except for the repo. According to your post, there is not one positive tradeline, either open or closed on your CR to show the new lender your ability and desire to pay any loan.

I do have my current auto loan that has a positive payment history-- 4 years, no missed payments, no lates. I will be paying that off soon. Could that possibly give me a boost?

StartingOver10 · ‎07-20-2015

@Anonymous wrote:

@StartingOver10 wrote:
I am going to ask the question that everyone is thinking right now: If your income is $50k and you have no monthly bills except for the $500, where is the rest of the money from your income going?

50K is gross, not net. The $500 is in addition to the car payment and insurance (which is about another $800). Plus I pay my own health insurance/taxes out of the 50K and I have 6 mouths to feed.

Right now you have only CO's and collections on your account, except for the repo. According to your post, there is not one positive tradeline, either open or closed on your CR to show the new lender your ability and desire to pay any loan.

I do have my current auto loan that has a positive payment history-- 4 years, no missed payments, no lates. I will be paying that off soon. Could that possibly give me a boost?

^^^This is good that you have a positive tradeline. It is an installment loan which doeesn't help your score as much. Don't get me wrong, it is good that you have a 4 year long term installment loan paid on time every time to show your ability to pay. It is most especially good to have this positive history when you are going to get another car loan. It is possible your auto enhanced scores are higher. Have you pulled your scores here yet? The auto enhanced scores would be in your 3 B report along with your FICO 8 scores.

Installment loans do not contribute to your FICO score nearly as much as a revolving (credit card) tradeline. Installment loans contribute about 10% of your score and revolving contribute 30% (utilization) and payments 35%. For much more detailed information, go to the Understanding FICO scoring section of MyFICO and read the stickies.

For your immediate help though, try the Rebuilding Forum here. I do suspect that you could really boost your score quite a bit by getting one credit card or possibly two. Get a secured card if that is what you qualify for now and I bet you see a significant jump in your scores. The advantage there is when you go for your next auto loan you could very well end up with a much better interest rate if you get your scores over 600. You do not need a big secured card line. Just keep the utilization low on it. In the rebuiliding forum they discuss secured cards and which is best. http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/2-best-secured-CC/m-p/2883415#M327325

It may be possible for you to get a Cap One unsecured card. I don't know. Check their prequalify site to see if you can get one. The secret to bumping your score right away is to have a couple of credit cards, most say 3 cards. But start with one or two and you will see a jump. Then go for your next car loan.

sccredit · ‎07-27-2015

In your original post you said that you had insurance and that you originally bought GAP. You should not be out of pocket anything on your old car. Just FYI

Anonymous · ‎08-30-2015

Just wanted everyone to know that I was able to get financing through GM Financial. The interest rate is better than previous (9% as compared to 19%) previously. I purchased a 2012 GMC Acadia and couldn't be happier. I did not need a co-sign either. My FICO score was pretty much spot-on with what the company pulled. So glad that I cleaned everything up and found the exact car I was interested in before I went to the lot. That helps immensely. It also helps when you go to a larger dealer because the have more avenues of financing than other traditional dealers.

notpaul · ‎08-31-2015

Congrats, enjoy your new car. I've been looking at those maybe for next year. What kind of payment and price did you get for it?

6/15 DC BK7, starting EQ FICO score 563

2/16 FICO EQ 661. TU 653, EX 660
Current CC Accounts: Capital One QS1 500; Overstock 1300; Care Credit 5000; Barclay Rewards MC 1300; JCPenney 3500; Amazon 3500; WalMart 3500; Target 500; PenFed Promise Visa 2000; PenFed CLOC 500; NFCU Flagship 12500; NFCU Platinum 8500; Credit One 1000.