Ford motor credit, turning in my lease

[Anonymous]

Hi everyone,

I'm currently in a 24 month lease with ford. My lease is up in February but I got a call saying they're doing early bird turn in where I can waive the remaining payments and get into something new. I have a few qestions regarding this process. First of all my utilization is a lot higher than when I got the car back in 2015 (up to the high 80% up from about 50% in 2015). Do they do a hard pull for a new lease? I have no lates or no new baddies since my original lease. I'm worried about a need for a consigner due to my score. Experian has my score as 630, 668 as auto score 8 and 606 as auto score 2, discover shows 612, cap one credit credit works show 571. I'm debating on waiting a few months to lower my utilization. Any advice would be appreciated!

[Appleman]

Yes, they will pull credit again when applying for a new loan/lease. 

Go to Capitalone Navigator and see what they might offer you as a loan. This is a Soft pull (SP) unless you go through with the financing. My guess is your interest rate will be fairly high with an 80% utilization on your cards.

It sounds like Ford may have given the dealer some cash to help people trade up/in OR it is just a sales gimmick and they will bury the cost in the fine print. It is model year end and I am sure they are needing to move some vehicles.

I would say to hold off on trading in early and pay that utilization down as low as possible. Also, read up on leases as they can be tricky but not impossible to get a good deal. 

[Anonymous]

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@Appleman wrote:

Yes, they will pull credit again when applying for a new loan/lease. 

Go to Capitalone Navigator and see what they might offer you as a loan. This is a Soft pull (SP) unless you go through with the financing. My guess is your interest rate will be fairly high with an 80% utilization on your cards.

It sounds like Ford may have given the dealer some cash to help people trade up/in OR it is just a sales gimmick and they will bury the cost in the fine print. It is model year end and I am sure they are needing to move some vehicles.

I would say to hold off on trading in early and pay that utilization down as low as possible. Also, read up on leases as they can be tricky but not impossible to get a good deal. 

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+1

Additionally, I would refrain from obtaining another vehicle with a payment until you've worked out your debt situation.

[Anonymous]

Thanks for the feedback. I've had some major purchases recently and am in the process of paying down my cc debt and should be able to do so in 3-4 months. @SteelerNyc when my lease is up in February and my debt should be down to the 20-30% range. The main reason for my post was looking for advice on what my approval odds were given my current situation.

[Anonymous]

Is that 80% aggregate or 80% on a single account?

What's the HIGHEST utilization you have on any one account?

[Anonymous]

87% total utilization.

[Anonymous]

Your highest card has 87% utilization?  That's the question I asked -- what's your highest utilization on any one card?

[Anonymous]

Sorry I misread your post. My highest card is at 93%. Working hardest on getting each card as low as possible but focusing on that first.

[Anonymous]

Any utilization that posts over 89% is considered "maxed out" and can cost you significant amount of FICO points just on that notation.  Remember that if you do pay that 93% down to 89% but it gets interest posted, that interest may post at statement cut and then report more than 89% again immediately.

So you want to pay down to 88% minus whatever interest is going to post so that it reports less than 89%.  That will help return some FICO points -- make sure NO accounts post more than 89%.

Getting a new car right now doesn't make financial sense from my napkin math.  Since your lease is up in February, I'd carry it til then and cut your spending everywhere so you can pay all your cards down to below 40% individual utilization and as low aggregate utilization as is possible.

[Anonymous]

Thanks! If it's possible I can get into a lower payment I'll explore turning it in but otherwise I agree with you and will wait it out.