Loan Approval Chances?

Anonymous · ‎02-18-2019

Hey everyone,

I plan to get a truck this summer once all of my credit card debt is paid off (April) as a 30th birthday gift to myself and just thought I'd ask what my chances are of getting approved for a 30-32K car loan given my stats..

Credit Score: 757 FICO Score 9 Experian (Wells Fargo App), 778 Transunion (Credit Karma), 772 Equifax (Credit Karma)

Income: 39K

Length of Employment: 3 years

Previous Loan Experience: 0

Credit Card Utilization: 11% ($14,450 credit line across 5 cards)

Debt-to-Income Ratio: 4%

Avg Age of Credit History: 3 Years, 11 Months (oldest: 6 years)

Truck: 2015 Tacoma TRD Sport, Dual Cab Long Bed 4X4

Cost: 30-32K

So what do you guys think my chances are to land a 32K loan? What's the minimum amount of $ I should expect to put down?

This is literally the only vehicle I will settle for haha. I'm in Southern CA, if that helps.

I appreciate any advice.

Thanks in advance!

Anonymous · ‎02-18-2019

Those Credit Karma scores don't mean much just a likely indicator theer is nothing negative on your report.

Try and get some real scores FICO Scores and try and get the FICO Auto Scores too. Those of us who pay for MyFICO get the FICO scores we need here. Google free FICO Score. I know Discover will give you your Experian FICO score for free even if you don't have a Discover or better yet pay $1 for one of those trials I forget which ones give you a FICO 8 tripple report. Or best yet pay for MyFICO and see your FICO Scores and FICO Auto Scores.

Toyota is a captive lender so that's good you may have a decent chance but it depends on what score they use which certainly is not a Credit Karma score. At time my FICO 8 score has been 100 points higher or lower than Credit Karma. My FICO Auto Scores fluctuate from my FICO 8 as well.

It seems like you have high debt to income ratio if you earn $39,000 and have $14,450 in credit card debt.

So can you really afford this car payment? Let's say you get approved at 8% for 7 years the payment is around $500 a month for 7 years. Even if you got approved for 6% it's $467 for 7 years. I am assuming $32K financed, you pay taxes, fees as a downpayment.

You can also try credit unions like DCU where anyone can join. DCU pulls your Equifax Mortgage FICO score which having no installment loans like your auto score could be a bit lower than your FICO scores which we don't know what they are because they have nothing to do with Credit Karma.

The only car you will settle for? If that's true then start today putting that $500 payment plus the cost of insurance into a savings account. Do yourself a favor do that for at least 3 months to ensure you can handle the payment no problem then use that towards the down payment.

Also consider a CPO. There is absolutely nothing wrong with a certified pre-owned and 1) They often come with better warranties (don't know about Toyota) 2) used cars are much easier to finance than new cars as they are already partially depreciated. My CPO Audi came with an unlimited mile warranty and almost as many months of warranty as if it were new.

It is scary to think you want to finance a car that costs 82% of your gross annual salary and I would advise against it.

However like I said get your real scores, apply at a good credit union, maybe even try Capital One Auto Navigator for a free pre-approval.

I think you will get approved but may end up regretting a $500+/month loan payment.

Keep us posted.

FYI Credit Karma is currently 110 points lower than my FICO 8 but don't get too excited there was a time it was 100 points higher.

Anonymous · ‎02-18-2019

@Anonymous wrote:
Those Credit Karma scores don't mean much just a likely indicator theer is nothing negative on your report.
Try and get some real scores FICO Scores and try and get the FICO Auto Scores too. Those of us who pay for MyFICO get the FICO scores we need here. Google free FICO Score. I know Discover will give you your Experian FICO score for free even if you don't have a Discover or better yet pay $1 for one of those trials I forget which ones give you a FICO 8 tripple report. Or best yet pay for MyFICO and see your FICO Scores and FICO Auto Scores.

Toyota is a captive lender so that's good you may have a decent chance but it depends on what score they use which certainly is not a Credit Karma score. At time my FICO 8 score has been 100 points higher or lower than Credit Karma. My FICO Auto Scores fluctuate from my FICO 8 as well.

It seems like you have high debt to income ratio if you earn $39,000 and have $14,450 in credit card debt.

So can you really afford this car payment? Let's say you get approved at 8% for 7 years the payment is around $500 a month for 7 years. Even if you got approved for 6% it's $467 for 7 years. I am assuming $32K financed, you pay taxes, fees as a downpayment.

You can also try credit unions like DCU where anyone can join. DCU pulls your Equifax Mortgage FICO score which having no installment loans like your auto score could be a bit lower than your FICO scores which we don't know what they are because they have nothing to do with Credit Karma.

The only car you will settle for? If that's true then start today putting that $500 payment plus the cost of insurance into a savings account. Do yourself a favor do that for at least 3 months to ensure you can handle the payment no problem then use that towards the down payment.

Also consider a CPO. There is absolutely nothing wrong with a certified pre-owned and 1) They often come with better warranties (don't know about Toyota) 2) used cars are much easier to finance than new cars as they are already partially depreciated. My CPO Audi came with an unlimited mile warranty and almost as many months of warranty as if it were new.

It is scary to think you want to finance a car that costs 82% of your gross annual salary and I would advise against it.

However like I said get your real scores, apply at a good credit union, maybe even try Capital One Auto Navigator for a free pre-approval.

I think you will get approved but may end up regretting a $500+/month loan payment.

Keep us posted.

FYI Credit Karma is currently 110 points lower than my FICO 8 but don't get too excited there was a time it was 100 points higher.

Thanks for the reply, and all the great advice!

My debt isn't $14,450, that's my credit line across the 5 cards. Sorry for the confusion haha. My debt is just a little over $1,500.

Also, the truck I'd get would be a 2015 model. I don't like the new ones at all.

I'm confident I can handle the $500+/month loan payment. I'm shooting to get the truck in June, and I've been paying down my debt since last April ($740/ month) no problem. I'll most likely be done early April which will give me a little bit of time to save for a down payment as well. Me being as picky as I am about the right truck will also buy me time to save haha.

So according to my Wells Fargo App, my FICO Score 9 is at 757. I knew I couldn't rely on Credit Karma to be my exact score, which is why I mentioned it.

Loquat · ‎02-18-2019

OP I would check your auto Fico scores. Obtaining a car loan is not that hard...honestly, getting approved for a vehicle is much easier than getting a credit card most of the time. I think once you pay your debt down and shouldn't have any issues obtaining and auto loan. Take the time you have now and do your homework and when you're ready to pull the trigger you should be educated and in good shape to get the vehicle that you're wanting.

Anonymous · ‎02-18-2019

@Loquat wrote:
OP I would check your auto Fico scores. Obtaining a car loan is not that hard...honestly, getting approved for a vehicle is much easier than getting a credit card most of the time. I think once you pay your debt down and shouldn't have any issues obtaining and auto loan. Take the time you have now and do your homework and when you're ready to pull the trigger you should be educated and in good shape to get the vehicle that you're wanting.

Thanks for the reply!

Basically I just wanted to know if that 32k auto loan amount is attainable given my stats I listed.

I really want that truck! Haha

Anonymous · ‎02-19-2019

One of the key factors in getting a car loan is your debt to income ratio. Finance companies will look more at that than anything else. Credit scores means or count less when compare to your ability to pay. In addition, time on the job and residency stability is also important. One commentator pointed out that you are looking for a loan that is 82% of your yearly income. The could be a red flag for any lender; I would suggest keeping it at 50%. Also, follow the advice given here concerning getting your fico auto scores--that's what lenders use. The fact that you had no auto loan experience could trigger a high interest loan.
Well, try and see what happens. Come back and let us know.
Good luck

Anonymous · ‎02-19-2019

@Anonymous wrote:
One of the key factors in getting a car loan is your debt to income ratio. Finance companies will look more at that than anything else. Credit scores means or count less when compare to your ability to pay. In addition, time on the job and residency stability is also important. One commentator pointed out that you are looking for a loan that is 82% of your yearly income. The could be a red flag for any lender; I would suggest keeping it at 50%. Also, follow the advice given here concerning getting your fico auto scores--that's what lenders use. The fact that you had no auto loan experience could trigger a high interest loan.
Well, try and see what happens. Come back and let us know.
Good luck

Thanks for the reply.

On my Wells Fargo App, my Fico Score 9 is 757.

Not sure if that's the Fico Auto Score you guys might be referring to..

Anonymous · ‎02-19-2019

@Loquat wrote:
OP I would check your auto Fico scores. Obtaining a car loan is not that hard...honestly, getting approved for a vehicle is much easier than getting a credit card most of the time. I think once you pay your debt down and shouldn't have any issues obtaining and auto loan. Take the time you have now and do your homework and when you're ready to pull the trigger you should be educated and in good shape to get the vehicle that you're wanting.

Wells Fargo app is showing my FICO Score 9 is 757.

Is that the same as the Auto FICO Score?

Anonymous · ‎02-20-2019

Most lenders havent adopted to that FICO version.; However, if your fico 9 is that high, then there's little variation from other versions. Most lenders will look at version 8 across all three bureaus. FICO risk scores v.5,4,and 2 are also regularly used.
What State are you in, again? Any finance company that pulls EXPERIAN will use version 8 more than 90% of the time. Your location will determine what bureau is used.
Good luck.

Anonymous · ‎02-20-2019

@Anonymous wrote:
Most lenders havent adopted to that FICO version.; However, if your fico 9 is that high, then there's little variation from other versions. Most lenders will look at version 8 across all three bureaus. FICO risk scores v.5,4,and 2 are also regularly used.
What State are you in, again? Any finance company that pulls EXPERIAN will use version 8 more than 90% of the time. Your location will determine what bureau is used.
Good luck.

Ahh gotcha. Im in California.

I know I should expect a high interest rate because of zero loan history, but just want to know, is $32K loan amount possible with the lack of that? Even if, say I had a 700+ FICO 8 score??