Really worried I can't get financing.....

Anonymous · ‎05-05-2009

Hi everyone. I am trying to obtain a $35k auto loan for a new car but my score is sitting at a 630 right now. What do you think my chances of getting approved are?

I've had 3-4 different auto loans in the past ranging from $7k - $26k....always paid on time.
my credit report is crystal clear for the past 3 years and all of my credit card balances are <5% util. and get paid off every month.
I have lived at the same residence for past 3 years, I have worked at the same place for the past 3 years.
I make $70k annually.
My debt to income is about 35%.

Please don't bash me....I know that no one needs a new car. I have no family or outside responsibilities so I would like to purchase my dream car. I've worked really hard to rebuild my credit in the past 3 years and it is taking forever to go up. My FICO started in the 400s so this has been a long road ........

Message Edited by babyjulie83 on 05-05-2009 11:38 AM

Message Edited by babyjulie83 on 05-05-2009 11:39 AM

moondog7324 · ‎05-05-2009

You know what you can afford, and what your wants are. What are the negs holding your score down? Can you wait 3 months to try to clear some things up? What is this dream car?

Message Edited by moondog7324 on 05-05-2009 12:49 PM

Anonymous · ‎05-05-2009

@moondog7324 wrote:
You know what you can afford, and what your wants are. What are the negs holding your score down? Can you wait 3 months to try to clear some things up? What is this dream car?
Message Edited by moondog7324 on 05-05-2009 12:49 PM

I'm not exactly sure what is bringing down my score. I had about 3 accounts in collection from about 4 years ago that I paid off after they were sent to collections....they totaled to about $2k. I have student loans but they get paid on time every month. I honestly don't know what is bringing my score down....I guess those old collection accounts still are a little bit. ?

The dream car is the 2010 Camaro. The car is being built right now and it will probably be another month before I actually start trying to get a loan. Even if I waited a few more months to try and boost my credit score I don't know what I would do to boost it.....maybe it just needs time....my score just sits there at a stagnant 630.

One thing I forgot that is bringing down my score is a chargeoff from Macy's. Back when I was in college I was stupid and did not pay my bill. It is showing up on my credit report as still being owned by Macy's and is only a balance of $306. I tried to get them to do a PFD but they refused several times and told me that they don't do any PFDs. I have no problem just paying it off but i'm afraid if I pay it that my score will drop.....and God knows I don't need my already-low score to drop.

Anonymous · ‎05-05-2009

Hi... I would think you can find financing because 630 is not a bad score. For sure, you can

get approved with Capital One, Roadloans, Drive, etc. Have you tried your own bank or

credit union yet as well? Might want to start there and see how you make out and then

go on to some of the others I mentioned above. Good luck on the Camaro... that is going to

be a terrific car... love the looks of it.

Anonymous · ‎05-05-2009

babyjulie -

You are in luck if one of your baddies is a low dollar Macy's charge off.

Macy's has a "Reinstatement" program offered through their recovery department. Essentially, when you pay the charge off amount in full, they will update that item to remove the derogatory items and they will issue you a new account with a CL in the amount you paid.

This is something you could have taken care of in the next 30 to 45 days....and for around $300 it a great investment in your credit.

Anonymous · ‎05-05-2009

@Anonymous wrote:
babyjulie -

You are in luck if one of your baddies is a low dollar Macy's charge off.

Macy's has a "Reinstatement" program offered through their recovery department. Essentially, when you pay the charge off amount in full, they will update that item to remove the derogatory items and they will issue you a new account with a CL in the amount you paid.

This is something you could have taken care of in the next 30 to 45 days....and for around $300 it a great investment in your credit.

A reinstatement program sounds fantastic and I would do it in a heartbeat. There's no possible way that this could lessen my credit score.....I don't think so anyways.

The problem is that I have called Macy's collection department several times and several different people in that department have told me that there is nothing I can do but pay it off and that then they will report it as paid after collections....which won't help me. So I don't know what to do except to keep calling and hopefully get a person who will do this reinstatement program with me.

I guess I would need to get something in writing that says i'll be reinstated after paying the full balance?

Anonymous · ‎05-05-2009

Call Macy's and ask for their "recovery department." Then tell them you are interested in the "reinstatement program." Use these words, don't speak about settlement, collections or PFD.

Macy's: 800-543-9617 (Recovery Services)

Let us know how you come out on this.

Message Edited by txjohn on 05-06-2009 04:44 AM

Anonymous · ‎05-06-2009

Ok so I called and spoke to someone in the recovery department this morning. I asked her to tell me about the reinstatement program and how it works. She said the fastest way to take care of it is to go to a Macy's store and pay the balance at one of the cashier stations. She said once that was paid that they would immediately send out a new Macy's card with a limit identical to the amount I paid.

She also told me that the old chargeoff account will show up on my credit report as 'paid in full after chargeoff' and that the new account would be opened as of the day my balance was paid. She wasn't sure if an inquiry would take place or not.

So I am going to take part in this reinstatement program for sure....my question is should I do it before or after I get financing for my car? With a score of 630 I can't bear for it to go down at all......

I'm not sure how participating in this reinstatement program will affect my score....it seems like all it would do is drop my score b/c of a possible new inquiry and a recently opened credit line. Having the chargeoff account as paid after chargeoff won't help my score b/c the damage was already done when it was charged off.

Any ideas or advice guys? I am going to do it but if it will probably drop my credit score then I will wait until after the car financing.......credit scores are like a rubix cube.....

Anonymous · ‎05-06-2009

Hmmmm.

You might need to hold off. Macy's is going to do a hard pull, even though you are guaranteed the new account after you pay the old. You also will end up with a new account. And you will have a more recent "Date Reported" on the Macy's. All of these can reduce your FICO short term.

However, my understanding was that they removed the old derogs like a GW act. But maybe the info I was relying on is not quite accurate. I know they have a reinstatement program, but I was not aware that the derog would be changed to "paid after CO"

The one positive from the paid after CO, is that if this account is affecting your CC utilization, this would be reduced, but I doubt this is enough to offset the inquiry, new account and updated dated reported.

NEW QUESTION: How much are paying down on the new loan?

Message Edited by txjohn on 05-06-2009 07:53 AM

Anonymous · ‎05-06-2009

@Anonymous wrote:
Hmmmm.

You might need to hold off. Macy's is going to do a hard pull, even though you are guaranteed the new account after you pay the old. You also will end up with a new account. And you will have a more recent "Date Reported" on the Macy's. All of these can reduce your FICO short term.

However, my understanding was that they removed the old derogs like a GW act. But maybe the info I was relying on is not quite accurate. I know they have a reinstatement program, but I was not aware that the derog would be changed to "paid after CO"

The one positive from the paid after CO, is that if this account is affecting your CC utilization, this would be reduced, but I doubt this is enough to offset the inquiry, new account and updated dated reported.

NEW QUESTION: How much are paying down on the new loan?
Message Edited by txjohn on 05-06-2009 07:53 AM

Yeah, if I knew for sure they would remove the derogatory Macy's account then I think it would be worth it to take care of before the car financing....but this just isn't something I'll know for sure until I do it.

I do not have very much to put down....worst case senario, I only have about $3k to put down (I'm not exactly sure when the car will come in....I preordered). I did have more saved up but I ran into some medical problems in early January and had to dish out some money for that. I really wish I had more to put down. I would just wait maybe until the end of the year but there is no way the car I have now will make it until then. Right now I drive a 99 Buick regal that is in the repair shop constantly.