Chances of auto loan approval with lower credit scores?

[xcv]

Hi guys! I'm looking at getting a new car this month, and since it's my first new car purchase I figured I should ask you guys just to get a sanity check on what I should expect. Prior to 2021, my credit was poor due to mistakes made in 2017, but at the start of late 2020, I decided to start taking things seriously so my credit has been improving these past few months.

I make $72k/year on salary, with an additional $10k-$15k from self-employed work. I have $32k in federal student loans and no credit card debt. My current utilization is 33% of a $300 total CL. I have two charge-offs from 2017, both of which were paid in full at the start of this year. I also have some late payments scattered on my credit report and on some closed accounts, but across all of my current accounts, I've only had one late payment since 2020 (which was in January 2020). I should add that I do have a joint loan from Carmax on my credit report from 2015 in which no payments were missed and it was paid off in under 12 months.

My DTI is insanely low. I gross $6k/mo on salary but my only DTI-eligible debt is the $600 I pay for rent and the $25 minimum payment for my current Capital One card.

My current FICO scores are:

Auto Score 8:

TU: 609

EQ: 632

EX: 614

FICO Auto Score 2, 4, 5:

EX: 684

TU: 630

EQ: 638

FICO Auto Score 9:

TU: 566

EQ: 630

EX: 612

My TU scores are somewhat out of date as they don't reflect scores with the updated 33% utilization from Capital One yet (it's still reporting it as 101%), only EX/EQ do.

I'm trying to get a roughly $43k - $45k loan for a car that's $52k after TTL. I'll be putting $7k-$10k down. 

So far I've been pre-approved for Capital One for up to $53k @ 4.45%, but I was wondering if that was the best I would be able to get given my scores? I also applied for DCU since I know they pull EQ and not TU but I'm not expecting anything to come of it.

Is what CapOne offered me the best I'm going to be able to get? The only thing that would change on my credit profile between now and a possible purchase next week would be my TU report updating to show reduced utilization.

[Anonymous]

Honestly it's very hard to predict what rate you can get. CapOne is a good start though and that's a good rate given the scores you provided. I'd pay your credit card debt down from 33% to $10 though - that crosses two scoring tiers and could net you upwards of 20 points all by itself.

Getting a loan for a car is possible for almost anyone with income. It's the rate that's up in the air.

[Mjhall85]

Do you just have the one credit card ? Capital one gave you a pretty solid rate with your scores. What brand of vehicle are you planning on buy ? Sometimes the captive lender has some good rates as well.

[xcv]

@Anonymous  Yeah I regret not doing that, it was really an oversight on my part, I ended up paying it all off on March 31 but I missed the cutoff so that's on me lmao. I don't know why I didn't just pay it all off when I can easily do so.

I went ahead and applied through PenFed and they approved me but at 5.70%. So it's creeping in the wrong direction.

[xcv]

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@Mjhall85 wrote:

Do you just have the one credit card ? Capital one gave you a pretty solid rate with your scores. What brand of vehicle are you planning on buy ? Sometimes the captive lender has some good rates as well.

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Yeah I just have the one. I should've applied for more lines of credit but it really wasn't a priority as I had other things I wanted to get under control first. Now that all the fires are put out I can do that now too.

But I'm looking at a Toyota, but I don't know how lenient TFS would be with me.

[Mjhall85]

From what I read on here TFS is pretty solid and will use your highest score. Once you have 3 cards open you'll get optimal scoring so you may get a decent boost. But under 5% is a pretty good rate though. I would contact your local dealer and see what deals they have and they should be able to tell you the credit tiers for financing.

[xcv]

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@Mjhall85 wrote:

From what I read on here TFS is pretty solid and will use your highest score. Once you have 3 cards open you'll get optimal scoring so you may get a decent boost. But under 5% is a pretty good rate though. I would contact your local dealer and see what deals they have and they should be able to tell you the credit tiers for financing.

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Tbh something told me to do it today but I was paranoid that TFS would pull TU, see the utilization at 100%+ there despite it being lower on EQ/EX and then deny me. But I'll try tomorrow and see.

[Anonymous]

I purchased my truck in December of 2020.  My scores were all below 625 but I was putting 10K down.  I was originally approved through Santander and were signing papers for that when Toyota Financial called and offered 3 percentage points less than Santander if I would purchase a warranty.  Even with the warranty purchase my payments are lower than what Santander wanted.  

[xcv]

Well DCU denied me due to negative history I accrued in 2017/2018 (which I really should goodwill away). 

So far I have the CapOne Prequal and PenFed approval but I'm going to try some local CUs and see what they say. 

[4sallypat]

If the captive bank is TFS, ask the dealer if they would go to bat for you considering you are putting down 20%?

Usually when a dealer backs up the customer, they are able to bump up you up a credit tier.

I have had to do this once on a Tundra because my score was Tier 2 and to qualify for their best rate, the dealer contacted TFS and asked for a tier bump which helped me out big time!