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Capacity, Character, Collateral, BUT ...

Auto Loans for ANY Credit Situation. Immediate Response.
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Established Member

Capacity, Character, Collateral, BUT ...

I'm in the market for a new vehicle.  I have a decent and solid income.  The vehicle options that I'm going for are within my range and affordable.  My payment history shows my car note being paid on time for over 2 years.  I have a good mix of several lines of credit and installment loans that have on-time payments and my utilization is under 30% for each one.  With the exception of one credit card, which is about 60%.  I also have a 9-year old discharged Chap 7.  Everything was looking good for me to get the vehicle that I wanted, but a medical collection popped up on my credit report and dropped my score by 12 points - below 600 but higher than 580.  This was devastating!  While I'm still working to get the vehicle of my choice and I am aware that I may have to pay a higher interest rate, I need to know two things:

1.  Do you think I can be approved for a vehicle, still ... in spite of?

2.  I'm driving about 2 hours away to purchase this vehicle, so should I speak with the finance manager, BEFORE I show up and let him know my situation?

 

Any advice will be helpful.  Thanks!

Message 1 of 5
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Senior Contributor

Re: Capacity, Character, Collateral, BUT ...

A medical collection dropping you score 12 points isn't devastating, a credit score around 600 is. There must be something much more negative going on with your credit than a 9 year old BK, one card at 60%, and a medical collection for your score to only be around 600. You are going to be very hard to finance, so yes I would talk to the finance guy before wasting a 2 hour drive. You might also try Capital One Auto, but with your score I think that's a stretch for them. Anything you can do to improve your credit before trying to finance a car? Payoff the medical collection? Pay down that 60% credit card? Fix other problems causing such a low credit score? A score of 670+ will get you into the A grade tier of auto finance options, right now you're in the D- grade tier.


Fico 08: 734/716/734 TU/EX/EQ
Message 2 of 5
Established Member

Re: Capacity, Character, Collateral, BUT ...

Hi DaveinAZ,

I just wanted to follow up with you to let you know that there is more to getting a vehicle than having a superb credit score.  I was able to secure a 2019 Subaru Forester Touring with a very less than perfect FICO Auto Score (to the naked eye). But with 2 years of on-time car payments and a few other caveats I walked away with the vehicle of my dreams.  I told you that I was going to get it and I GOT IT!  

Message 3 of 5
Regular Contributor

Re: Capacity, Character, Collateral, BUT ...

Congratulations on your purchase.
I've been where you are trying to go and I don't wanna go back.
Message 4 of 5
Highlighted
Valued Contributor

Re: Capacity, Character, Collateral, BUT ...


@rebeme44 wrote:

Hi DaveinAZ,

I just wanted to follow up with you to let you know that there is more to getting a vehicle than having a superb credit score.  I was able to secure a 2019 Subaru Forester Touring with a very less than perfect FICO Auto Score (to the naked eye). But with 2 years of on-time car payments and a few other caveats I walked away with the vehicle of my dreams.  I told you that I was going to get it and I GOT IT!  


You are entirely correct.  Car dealers want to sell cars, banks want to finance them and as long as you show them that you can make the payments they will do a deal.  The rub with lower credit scores is in the terms.  Lower credit scores almost always means higher interest (very rarely there are exceptions). The answer for just about anyone who asks if they qualify should be yes.  The most informed advice should be about how to secure the best financing and then how to refinance that loan in the future when your scores improve.  I had to take a loan at 12.5% that with a few months of rebuilding was refinanced to 4.29% saving me about 5k in interest over the life of the loan.  Point is as your credit improves keep the option of refinancing open. 

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