Good credit but getting rejected for auto loans???

Anonymous · ‎04-22-2010

Hi Everyone,

My first post on this forum. Hopefully someone can shed some insight on my predicament.

Some background info:

I am 23, a recent college grad, been working for the same company as an intern for close to 3 years, but full time since last August. I still live at my parents house for now, who moved 3 months ago, so I guess I have a new address.

My Equifax score is 765, pulled my free annual credit reports from all 3, nothing wrong or derogatory. My salary is in the high 70K range. I have applied to three lenders for a used auto loan and have been rejected by all three. I have yet to get their "explanation letters' in the mail (why the heck can't they just tell you online), but wanted to see if anyone had any insight on what I'm doing wrong and what could be the reason for the rejections. I have four credit cards, all paid in full every time, from 2-4 years of age. I recently paid off my student loans and have no other outstanding debts. Any ideas as to why I'm getting rejected?

Anonymous · ‎04-22-2010

Number 1 their isn't enough information given, like how much you were trying to finance. Also other potential problems I see and others may chime in as well but you are 23 years of age, living with your mother and fathers house while you're making 70 grand a year......You know what that looks like to me and I'm not the Loan Officer and I don't want you to take this the wrong way. But you come off as being very immature......if your FICO scores were 800 i wouldn't lend you a dime just because your file is probably paper thin, you're 23 years old still living with mom and dad making 70 grand a year...this screams red flags of being irresponsible.

Just my take...and I hope you didn't take it the wrong way....just my opinion.

Good Luck to you...

lkcrew426 · ‎04-22-2010

Have you had any other auto credit ever? I had the same problem when I first graduated college. My score was 752 and I was getting turned down left and right. Luckily, I had worked at a bank through college and they gave me a small $8200 loan without a cosignor. I was making around $56k at the time. I kept that car for a year and then sold it and moved on, but the point was that they want to see auto credit on your history. You might want to look for a recent college graduate program and/or lender or perhaps a CU. I know Acura (and probably Toyota) used to offer a program speciffically for new college grads.

Anonymous · ‎04-22-2010

No, I haven't had any auto credit before, only student loans and credit cards. You're right, maybe it's because of insufficient credit mix or something. I'll try my college credit union, maybe they'll help. Maybe applying in person would help too, I've just been sending off applications online, I could at least try to verbally convince them that I paid my student loans on time and that I have a steady salary.

Anonymous · ‎04-22-2010

5thwheel, hahaha, that's funny. I'm not offended at your interpretation but I doubt the loan officer would be so....harsh? First off, there is nowhere in the applications that I've submitted that I state I am living with my parents, only the address. I've been living at home to pay off my student loans faster, which I did in 6 months, so that was worth it for me. Now my parents are going on a two month vacation, so I figure there's no point in moving out now and getting someone to house-sit, let their mortgage money go to waste, and add in rent expenses of my own. Also a great opportunity to put those savings towards my car purchase. If anything I would construe that as just the opposite, financial responsibility. Why splurge my money when I can use the savings to buy some stuff, invest, etc.

I was trying to get a used auto loan. I made a total of three applications to Chase, Capital One, and B of A. Capital One and B of A I requested a 30K amount, which in hindsight was more than I needed. Chase I requested 21K. These are for dealer purchases, used car, 48 months. I have 10K as the down payment, but they didnt ask for such info in the application. My car will be in the 25K range, so I figure after tax n stuff it will be around 30K (freakin 9.75% tax in Los Angeles county).

lkcrew426 · ‎04-22-2010

Definetely go for the credit union. You should have no problems getting approved. I think those big boy lenders are looking at your lack of auto history and snarling when other logical lenders will get you approved no problems.

IMO, you are being responsible. But I'm also a young person that lived with the parentals to get financially ahead so I may be biased.

lkcrew426 · ‎04-22-2010

I don't know what credit union you're talking about, but you could try USAA or Alliant, too. I think USAA just gives you a blank check to go shop.

Anonymous · ‎04-22-2010

try national city/pnc bank. I purchased a used car last year for $31,500. my first auto loan. processing fee of $150. interest rate was low 5%. Age 23 only a student loan for $1700. and several credit cards with no balance and 100k credit limits. Income verifed at 95K and they pulled trans union. 774 credit score with no auto history. everywhere else denied, US bank, Chase, Chevy, BMW, Local dealers. They'll even write you a check so you can purchase what ever car you want. Or you can get an instant cashiers check made, but specificlly tied to a VIN.

Anonymous · ‎04-22-2010

If I were a loan officer I would interpret your situation pretty positively. Maybe it's the lack of car ownership history, combined with age and maybe length of full-time employment.

Definitely try a credit union or USAA. You could even try just talking to someone before actually applying to get some insight into how they might view the situation or what sort of extra information you might be able to provide.

y0rascal · ‎04-23-2010

@Anonymous wrote:
Number 1 their isn't enough information given, like how much you were trying to finance. Also other potential problems I see and others may chime in as well but you are 23 years of age, living with your mother and fathers house while you're making 70 grand a year......You know what that looks like to me and I'm not the Loan Officer and I don't want you to take this the wrong way. But you come off as being very immature......if your FICO scores were 800 i wouldn't lend you a dime just because your file is probably paper thin, you're 23 years old still living with mom and dad making 70 grand a year...this screams red flags of being irresponsible.

Just my take...and I hope you didn't take it the wrong way....just my opinion.

Good Luck to you...

Sorry 5thWheel don't mean to be rude, but this absolutey the wrong advice, if he was applying for a mortgage and not getting approved then savings would be more of an issue along with living with his parents. The fact for an auto loan and him living with his parents do not go hand in hand and is not causing him to not get approved. so dont suggest the boy to go get a mortgage or go rent a place is he does not need to.

Now what make and model vehicle are you looking to purchase? is it new or used? if it is new go to the dealership most of their own banks(Ford,Chev,Toyota,Honda) can and most likely will get you approved unknown if you will get the best rate.

If purchasing used check with credit unions local or national, with your score, I would give Penfed a shot a long with USAA,Allaint, Addison Avenue, our local Credit Union EFFCU.org (Now SCCU.org{Space Coast Credit Union} has a 2.99% deal going).

Shop around and what amount you looking to get? like the other poster you might need a small loan amount beater car for like a year then go get a real one or get a co-signer.