Sooooo last Thursday, my partner was T Boned and his Nissan Altima was totaled. $15.5k payout, he owes $700 due to no GAP insurance. No biggie here.
Here's the issue -- Scores are good, but all over the place in terms of FICO Auto etc. Here's what we have so far:
FICO 8 TU: 687 Auto 8: 670 Auto 4: 655
FICO 8 EX: 662 Auto 8: 641 Auto 5: 622 (?!)
FICO 8 EQ: 640 Auto 8: 622 Auto 5: 605
AAofA: 2 Years, oldest account 7 years old.
FLAWLESS Payment History Forever - No lates, EVER
Credit UTIL %: 39% *** See below (about $27,000 BEFORE recent paydown - see below)
INQs: Low on all 3 bureaus (Avg. 4-5 past 12 mos)
Here's the thnig that is dragging scores -- which we just alleviated -- one card was nearly maxed out at $11k / $13k line (85%). Between the two of us just paid that down last night to $2,000 (15%). That's a 70% drop in UTIL on that card, and will take total UTILIZATION down to about 28-30%. MyFICO estimates a score jump of about 15 pts per CRA.
DENIED BofA already, which I hear are very difficult apprvoals anyway. My buddy was deneid with a 720! Hate BofA, but I digress.
APPROVED Capital One but with crap rates -- 11.7%-16.4% !!
So with this new paydown, which will definitely boost scores, I want to call the CRAs and ask for a rapid rescore (2/3 bureuas will phone verfiy correct balances in their Consumer Affairs Dept) once the paydown posts tonight. With his current scores and assuming a good 15 point bump, where sholud he look ??
Credit unions? UNIFY, where I bank, said with a 660-689 they can do a rate of 5.6% which is not bad at all! If he breaks 689, it drops to about 3%. They use older FICO models though so Im not siure what that would pull as.
ANY ideas would be so appreciated. Cap1 rates seem ludacrous for hgih 600 scores. I was approved with a 647 at PENFED re-fi at 2.9% !!! And before you ask, my prtner hates PenFed becasue he refuses to do banking online where he cant walk into a branch, and we have none near us. Very old fashioned lol! THANK YOU !!!!
Rent a car. How much will Enterprise cost to have a month long economy car? (No discount weekly rate is $225/week)
This will give you 1 month to let the scores pop up and time to shop for a car. (But at the cost of $1,000, negates the finance savings) (I think I just got into an internet argument with myself and lost)
Or finance the car and refinance in 2-3 months.
Your partner can spend their money any way they like, and at least you can show the cost of the decision.
Good luck and let us know what you find.
If you can wait, I would definitely wait to see what happens with the drop in utilization. If not I would see what the dealership could do at this point, since you already applied a few places the inquiries should all count as one if you do it now. If you can get something reasonable now, you could still refinance in a few months once the scores increase.
The capital one rates are sometimes hit or miss, right out of bankrupcty they gave us 6%, but a few years later when our scores increased they offered something like 8-12%...we were able to get 3% at the dealership. Good Luck!
What type of vehicle is he considering? Most of the time, the Makes (Nissan, Ford, GMAC) own financing will have the best deals. Is he considering another Nissan? Nissan Motor Acceptance Credit (NMAC) always has great rates and they treat their customers wonderful...for repeat purchases. At this time of year almost all of the Makes are offering great incentives and rebates. Most of the time, it depends on how a deal is structured. Just like the UTI on a credit card, the lenders look at the amount they are lending on a vehicle over the term of the loan. Scores seem decent, They will look at previous auto history, as well.