Credit/Loan Approval Questions

Anonymous · ‎07-02-2015

Need some help on what to do to with my credit to get best interest rate.

So my current scores showing in MyFico are 603, 612 and 615. Fico Auto 8 score is 629. This past weekend I was at a dealership and they pulled my credit giving me a 583? Why would there be a difference?

Here's the situation.

Have about 4,800 left on a car payment that has about 16 months left, interest rate was around 1.9% This is my oldest account- opened in 2011. I just read that you should keep your oldest account opened.

I have about 4,700 in credit cards with the limits totalling 5,500 - I know this is high utilziation.

I will have access to 5k in cash in about a month. I cannot decide what would be the best route. Should I pay off my car or pay off credit cards? Which would look better?

I am leaning toward credit cards.

I had a collection account that I just paid off this past month that was about $700 which is still showing as not paid - it should be updated soon - but I'm sure that will get me declined until that is updated as paid.

Current payment is $310

My current income is about 2,600 per month.

I don't have rent or mortage payment.

I am wanting to finance for about 38-40k

Would it be better to take that 5k and put as a down payment? Or maybe even pay enough to get credit cards under 30%?

I also have a student loan that is in defferenment until 2018 - will this be taken into consideration to be approved? If so how do they factor this in?

I have a co-signer with about 2,600 per month also if needed.

What would give me the best credit profile to be approved with the best rate?

To add - I want a Jeep Wrangler - does anyone know how hard or what kind of score you need to get good financing?

Creditaddict · ‎07-02-2015

200% CREDIT CARDS!!

not only with your current credit will you never get close to 1.9% but your maxed credit cards are pushing your credit scores down even lower! (not to even mention I bet you don't have credit card interest rates below 10% and you are talking about paying a car of 2% off!)

Anonymous · ‎07-03-2015

In addition to what CA is saying, you want to finance well over 100% of your income. Even without a house payment that is excessive. Might want to consider looking a less expensive vehicle.

Anonymous · ‎07-03-2015

I typed the income part wrong it's about 70k combined (minimum as it can be more as my other half frequently works overtime but I've heard they only count your base income?) 1.9 would be nice but I'm not expecting to get 1.9% as circumstances were different when I got that, I think under 5 % would be do able. I was simply asking does it matter to the banks of you already have a car payment when you try to get one? And what would be the best solution. I've read you won't be approved with multiple auto loans but I've also read you shouldn't pay off or close your longest open account which is what my car loan would be. So I guess Paying off credit cards (12% rates) would be the best. I am hoping to get lower than 38-40k but I just put that out there as a max. What about the collection accounts that have been paid - will that be an automatic decline? I just checked and that account has been updated showing a zero balance but it says agreed to pay for less than full amount, this is incorrect as the original amount was wrong and I paid the correct amount we agreed to. Should I dispute this, how will that look to banks?

Metsfantransplant · ‎07-03-2015

@Anonymous wrote:
I typed the income part wrong it's about 70k combined (minimum as it can be more as my other half frequently works overtime but I've heard they only count your base income?) 1.9 would be nice but I'm not expecting to get 1.9% as circumstances were different when I got that, I think under 5 % would be do able. I was simply asking does it matter to the banks of you already have a car payment when you try to get one? And what would be the best solution. I've read you won't be approved with multiple auto loans but I've also read you shouldn't pay off or close your longest open account which is what my car loan would be. So I guess Paying off credit cards (12% rates) would be the best. I am hoping to get lower than 38-40k but I just put that out there as a max. What about the collection accounts that have been paid - will that be an automatic decline? I just checked and that account has been updated showing a zero balance but it says agreed to pay for less than full amount, this is incorrect as the original amount was wrong and I paid the correct amount we agreed to. Should I dispute this, how will that look to banks?

My wife and I actually just bought her a brand new Jeep Wrangler last month so I'll give you our experience. Our combined incoming is currently around 74k. We did file for a chapter 7 bankruptcy last year so our situation may be a little different. We had trouble getting approved because neither one of us had experience with car loan above 20k. Our scores were in the 640s/650s. Under 10% credit card utilization. We ended up having to have her dad co-sign on the loan with her through Ally Financial for 37k, 1k down at 6.9%. And he has a mid-700 score 150k income. We're hoping to refinance with Navy Fed ASAP.

Absolutely pay the credit cards down. To boost your score, one card should be reporting less than 10% balance, and the others zero. This will give you your best chance. And the reporting is correct if you did settle for anything less than the full amount owed.

Anonymous · ‎07-03-2015

My current auto loan is through Ally at 1.9%, that car was around 18k. He got approved for about 30k last year from Ally for 2.9% with no cosigner. Haven't had any bankruptcies, leins or anything, just a few small collection accounts that were disputes from all cell phone bills etc. They have all been paid. I pay atleast the minimum on my CC and most months I pay an extra $100 or so on each to get them down more. I will admit I have been pretty reckless with allowing those things get into collections and end up on my report but hopefully I have time to fix it, I am 22. I don't like to use age as an excuse but you make mistakes and learn. I just want to get it back on track and keep it there.