Joint application or not?

EaglesFan2006 · ‎08-13-2019

Just hoping to get some advice as to the best approach for my situation, as I'll need a car loan in about a month or so.

As of today My FICO 8 scores are in the 660s ...this is with a recent personal loan to pay off debt reporting, but the debts I paid off not updating yet...so when those credit cards report, I would excpect that score to tick up a bit...I haven't pulled my auto scores yet, going to do that closer to when I actually apply. I have a paid off auto loan on my report, 1 year-old mortgage, a student loan, and the new personal loan. No negatives. My wife scores are much lower, in the high 500s but on the way up...she has some lates and charge-offs, no collections. She has a 3-year old auto loan with no negatives on that. She does get a ton of mail from Capital One auto finance, so maybe her auto scores are a little better.

So my credit scores are better, but my debts are much higher since the mortgage appears on my report only, as well as the new personal loan. If I were to add a $500 auto loan (not looking for one that high, but just picking an easy number), my DTI would be just a hair above 49% which is on the brink. If I counted my wife's income (and her debts), the DTI drops to below 36% in total with what would be the new auto loan.

So...which situation gives me the better case...me solo with high DTI or a joint application where her credit scores are lower.

sccredit · ‎08-13-2019

IMO the higher income and lower DTI would help. Normally the pricing is based on the primary applicant's score (ie - you). The Capital One prequal is a soft pull so it may be advantageous to have wife look at that and see what they offer.

Anonymous · ‎08-13-2019

Capital One Auto Finance lets you combine household income for one applicant, which makes it convenient if you don't want to do a joint application.

EaglesFan2006 · ‎08-14-2019

@Anonymous wrote:
Capital One Auto Finance lets you combine household income for one applicant, which makes it convenient if you don't want to do a joint application.

Is that accurate? I didn't submit the Cap One from but I looked it over and it looks like it specifally says not to include household income if not a joint application

EaglesFan2006 · ‎08-14-2019

@sccredit wrote:
IMO the higher income and lower DTI would help. Normally the pricing is based on the primary applicant's score (ie - you). The Capital One prequal is a soft pull so it may be advantageous to have wife look at that and see what they offer.

So it's not like a mortgage (low middle score)?

sccredit · ‎08-14-2019

@EaglesFan2006 wrote:
@sccredit wrote:
IMO the higher income and lower DTI would help. Normally the pricing is based on the primary applicant's score (ie - you). The Capital One prequal is a soft pull so it may be advantageous to have wife look at that and see what they offer.
So it's not like a mortgage (low middle score)?

Not normally. For example, last year we leased DW a new car. I had the oncome and my score was 629 4 months post discharge. Hers was 827. She was first, I was second and they priced off of her 827. We received the lowest possible lease rate factor (interest rate equivalent).

EaglesFan2006 · ‎08-14-2019

Additional question...some of the cards i paid off, but not all, had trailing interest that reported...I paid them off the day the statement cut, but the problem is they already reported that charge and the minimum payments are showing up...most are small, ranging from a few bucks up to $26.21...6 cards in total reported this way. I'm assuming these charges will count against my DTI, but is that something I can explain to the lender?

Anonymous · ‎08-15-2019

Unless you're at a credit union and speaking with a rep, chances are that your numbers are just going into the lender's model to make their initial determination, so explaining your situation won't necessarily help.

You should definitely shop around and try with just you applying and then with your wife. Some lenders will average the two credit scores, some will take the top one, and others will take the bottom. And some lenders put more weight on DTI while others put more weight on credit score. That's why they all come up with different approval and interest rates. The only way to find the best rate is to compare your options.