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Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

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Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

This is my first post on MyFICO forums, so please bear with me. 

 

I'm looking to purchase a lightly-used 2018 Shelby GT350 ($57k, 1.8k miles) from a local Toyota dealership and am wondering what you guys think of my approval odds before I allow the dealership to run my credit. I'm a huge car guy and have been dreaming of owning this car for a few years now. 

 

Info about me:

- graduated in May 2018 with a BS in Computer Science

- employed at a leading tech company in California making 147.5k/year

- interned there last summer and throughout my senior year, so my technical length of employment is about 1.5 years

 

Credit scores according to MyFICO:

- EQ: 656

- TU: 690

- EXP: 669

- CK says I'm at 722 for TU/EQ, but we all know how accurate those scores are...

 

I have a few late payments on my record from 1.8 years ago:

- 2x 30-day lates from BarclayCard (paid off & closed)

- 1x 90-day late from BofA (paid off & closed - I've tried requesting a re-age and am in the middle of a GW campaign but it's not looking promising)

 

About the deal I'm hoping to get approved for: 

- applying from the dealership through a local credit union that I'm a member of

- $10k down (potentially $15k if people think that'd make a difference, but I'd prefer $10k)

- 48-month duration

 

Any thoughts on my chances for approval? Is there any chance they'll approve me? In all honesty, I don't mind a slightly higher APR if it means I can drive off in the car sooner rather than later. I'll be getting a big holiday bonus and will likely be able to pay off a huge chunk of the loan at the start of 2019.

 

Thanks for your time!! 

 

9/30/18: 621 EQ, 689 TU, 665 EXP
10/10/18: 656 EQ, 690 TU, 669 EXP
6/23/19: 658 EQ, 703 TU, 687 EXP
10/17/19: 703 EQ, 733 TU, 716 EXP
13 REPLIES 13

Re: Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

Additional information:

- this is my first auto loan, but not my first installment loan; I'm about halfway through paying off a 12-month $1.7k Affirm loan with no late payments.

- I cannot get a co-signer.

- My DTI is 0%. Current cards: BofA $1k limit, $0 current balance; Discover It Secured $200 limit, $0 current balance; AU on Chase Card with $42k limit, $0 current balance. 

9/30/18: 621 EQ, 689 TU, 665 EXP
10/10/18: 656 EQ, 690 TU, 669 EXP
6/23/19: 658 EQ, 703 TU, 687 EXP
10/17/19: 703 EQ, 733 TU, 716 EXP
Message 2 of 14
Contributor

Re: Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

What is the LTV of the loan you are thinking of? 10k down on a 20-30k car is a big difference than 10k down on a 100k car. If you are about 20-30% down then you should be fine. Large down payment can overcome MANY credit issues and your FICO scores aren't terrible. If you were 630s-650s then you may have a worse time. 

10/01/18

12/07/17

VentureOne - $6250
QuicksilverOne - $500
Citi Best Buy - $2000
Discover It - $1500
Self Lender Account - Paid in Full
American Express BCE - $1000
American Express PRG
American Express SPG - $1000
Toyota Financial 50% Paid
Message 3 of 14

Re: Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

The LTV is around 80% - the car's sticker price at the lot is $56,999. 

9/30/18: 621 EQ, 689 TU, 665 EXP
10/10/18: 656 EQ, 690 TU, 669 EXP
6/23/19: 658 EQ, 703 TU, 687 EXP
10/17/19: 703 EQ, 733 TU, 716 EXP
Message 4 of 14
Frequent Contributor

Re: Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

Nice car.  I had a 2003 Cobra that I modded to aout 600 HP.   Tech and car guy as well.

 

1) What are your goals?  Spendng money on cars has been the biggest waste in my life.  I had too many too soon for too much money.  If I was smarter I would have purchased a cheap condo in the late 80's instead of another new car.  Is owning a house beneficial to you or does it not matter in the next 5 years?

2) What's that payment $800-$1,000 a month?  can't amortize it right now.  I know it's a rare/special car but have you actually taken that car payment amount $800-$1,000 and put in the bank for a few months to make sure you can afford it without breaking a sweat?  

3) have you factored insurance?  What's your record if good probably not too bad but if you have points that could be a few extra grand a year on such a sports car.

4) Opportunity lost??  There are plenty of GT500's GT350's available and in 2020 there will be an awesome new GT500 with 720 HP.

 

Join DCU 1 Equifax Mortgage FICO score pull and that can be used for opening the account, getting a car loan and credit card at once.  

 

They have great rates but use your mortgage score from EQ so check that and make sure it's good.  If it's similar to the score you listed for EQ you should likely get approved 

 

Last piece of advice if it's the same rate for a longer term which it may be go for longer term.  You can still pay the same as if it were 48 months but it gives you extra room if something happens if you are paid ahead or just need a lower payment for a few months.

Message 5 of 14

Re: Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

Thanks for your reply. Those early-2000's Cobras were pretty sweet. 

 

1) In terms of goals - my main one right now is to get a nice car like the Shelby. I'm living comfortably, eating well, in great shape, have a super fulfilling relationship with someone who loves cars as much as I do, and love my job. The only piece in my life that's "missing" for me is a car that I actually enjoy driving. Owning a house isn't important to me given that I'll probably move to a different city in the next 3-4 years, and I love my current apartment. 

2) Payments should be about $1000-1100/month. I have savings of about $65,000 that I'm keeping around to purchase stock in my current company and don't want to use on the car unless absolutely necessary. So I definitely can afford the car, even in the case of an emergency. I also have zero student loans or other financial obligations.

3) My driving record is excellent. Zero points, zero claims, zero accidents, always had the good-grades discount. Insurance will double my current premium to $800 per 6 months, which is pretty manageable. 

4) I'm not a fan of the way the older GT500 looks, especially in comparison to the 350, and I really don't like forced-induction cars so the new 500 won't do it for me... this is the car I've wanted for years now and that won't change in the next 4-5 years. If it does change after that, by then I'll hopefully have a significantly higher salary and shouldn't have a problem affording a new fun car Smiley Happy

 

Thanks for your advice. I think I'm going to check out the dealership tomorrow and apply to my local credit union through them; if that doesn't work out, I'll try DCU. 

9/30/18: 621 EQ, 689 TU, 665 EXP
10/10/18: 656 EQ, 690 TU, 669 EXP
6/23/19: 658 EQ, 703 TU, 687 EXP
10/17/19: 703 EQ, 733 TU, 716 EXP
Message 6 of 14
Frequent Contributor

Re: Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

It really sounds like you have thought this through and have the answers.

The only thing I would still recommend is getting a longer term if it doesn't affect the interest rate.

Here are the rates from DCU assuming best tier just as an example.  This is now 0.25% higher than when I got my loan with them in June.  My EQ Mortgage score was 649 when they pulled it.  Remember that's not the FICO 8 score but the mortgage score.  In any event I didn't qualify for 2.99% but was offered 4.49%  Still a pretty good rate .

Looking at this chart if you finance $40K over 65 months vs 48 months the payment would be $218 less a month (if I did my math right).  

That's what I would do but still pay the higher payment planning to pay it off in 48 months but giving you wiggle room if there is a problem.

You would have to check with DCU because it depends on the lenders.  Some if you make larger payments it only goes to principal and doesn't count towards next payment, others you can specify others will automatically go towards next payments.  If the later was the case then if you over pay for a few months in a row you could skip a payment if need be.  At the least you would be able to pay the lower amount of $16.79 per $1,000 financed for a while if you needed to.

 

Term

Annual Percentage Rate(APR)*

Estimated Monthly Payment (per $1,000 financed)

 

up to 36 Months     3.24%    $29.19

Up to 48 months    3.24%     $22.24

Up to 65 months    3.24%     $16.79

 

The only thing I actually disagree with you on is that nothing beats the sound of a supercharger whine.  I'm looking at a Z06 C7 but know I can't do it yet.  It needs to wait a bit until I am done paying alimony.

 

Good luck keep us posted and be sure to post a picture of your car.

 

Message 7 of 14

Re: Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

Amazing news! I was able to finance & purchase the car I wanted on Friday. Here are some details:

 

APPROVING BANK: Santa Cruz Credit Union
BUREAU PULLED: EQ Auto
CREDIT SCORE: 640

SOFT PULL/HARD PULL: HARD
CUSTOMER STATE OF RESIDENCE: CALIFORNIA
NEW/USED: USED 
YEAR OF VEHICLE: 2018
MAKE: FORD
MODEL: SHELBY GT350 (Mustang)
MILEAGE: 1,820
FINANCE/LEASE: FINANCE

PURCHASE PRICE: $57,299
AMOUNT OF LOAN: $49k
TERM CONTRACTED: 72 mo
APR/LEASE RATE: 9.99
MONTHLY PAYMENT: $916.22
ANNUAL INCOME: $147,500
DEBT TO INCOME RATIO: Very very low
MISCELLANEOUS COMMENTARY: I accepted the high APR because I plan to pay off the loan in full with my holiday bonus. 

 

Here's a photo: https://imgur.com/a/DR4eVjb

9/30/18: 621 EQ, 689 TU, 665 EXP
10/10/18: 656 EQ, 690 TU, 669 EXP
6/23/19: 658 EQ, 703 TU, 687 EXP
10/17/19: 703 EQ, 733 TU, 716 EXP
Message 8 of 14
Valued Contributor

Re: Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

Congrats!  Very nice ride

Ch 7 Discharge 3/12/2018
Cap One QS1 $3,500, Wayfair $5,000, Blaze MC $3,000, Kohls $1,000
Infiniti Financial lease

Message 9 of 14
Established Contributor

Re: Chances of Auto Loan Approval with Mediocre Credit Score and One Serious Delinquency

Congrats to you!

 

Love the color!



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