Recent college graduate, why am I getting denied?

Anonymous · ‎06-24-2012

Summary:

Age: 22

Income: $20/hr 45hrs a week as a Software Developer. Avg out to about $3,500 month before taxes/40k a year.
Job: Software Developer for medical company. Been with them for 8 months. W-2 Income, verifiable.
Price of Car: Around $15,000, Used.

Current Credit Score: 680

Debt: None and CC's have no balance.

Current and ONLY lines of credit credit (all on my credit report) - ALL UNSECURED CC's
Bank of America Credit Card - Limit: $5,000 Age: 10months
Bank of America Credit Card - Limit: $1,000 Age: 19months
Capital One Credit Card - Limit: $750 Age: 10 months

I applied for Capital one auto blank check, however I was denied. I then applied for a Bank of America auto loan and was also denied. I applied to Capital one and BOA since I already have existing relationsihps with them and I figured that would help. Wrong. The reasons for denial are not enough types of credit and unlengthy credit history. I am looking to buy used and looking to borrow about 15k. Willing to put a down payment of 3-4k. I would of rather of been prequalified with a check in my hand before I go to any dealer. Should I just go to a dealer and have them help me get qualified instead? Also a co-signer is out of the question.

What I'm afraid of at a dealer is that they'll bully me by offering me high interest rates since I'm young, niave, have decent income for my age, have no other choice. What should I do?

(side note: i guess boa gives out 5k unsecured CC's easier then 15k secured loans)

webhopper · ‎06-24-2012

Look for dealerships that have college grad programs... The fact that you just got finished getting your degree and are now working in your field helps.. A college grad program would consider the fact that you've been in college, and therefore diminishes the fact that you may not have been with the same employer for 2 yrs as most lenders prefer.

Find a reputable dealer first... Ask friends and family who they bought their car from and if they would recommend them. Also, check for complaints online before you go to the dealership. A reputable dealership won't have a laundry list of complaints online about them. Shady ones will.

FICO 8:
Goal: Gardening!

Anonymous · ‎06-24-2012

Is there are credit union that you can go through. What I did was apply through my credit union first, then Capital One and then I went into the dealer. Additionally, find out what the suggested rates are for your credit score. Lastly, since you are a recent college graduate you might be able to get a discount on an auto loan. Good luck and do not give up!

Anonymous · ‎06-24-2012

@Anonymous wrote:
Is there are credit union that you can go through. What I did was apply through my credit union first, then Capital One and then I went into the dealer. Additionally, find out what the suggested rates are for your credit score. Lastly, since you are a recent college graduate you might be able to get a discount on an auto loan. Good luck and do not give up!

+1 to credit unions. Working with local credit unions as opposed to a big bank like BOA would be better anyways: lower interest rates, lower monthly payments, no hidden fees and much more. I am not sure why you're getting denied. You seem to have a handle on things.

Anonymous · ‎06-26-2012

@Anonymous wrote:
Summary:

Age: 22
Income: $20/hr 45hrs a week as a Software Developer. Avg out to about $3,500 month before taxes/40k a year.
Job: Software Developer for medical company. Been with them for 8 months. W-2 Income, verifiable.
Price of Car: Around $15,000, Used.
Current Credit Score: 680
Debt: None and CC's have no balance.

Current and ONLY lines of credit credit (all on my credit report) - ALL UNSECURED CC's
Bank of America Credit Card - Limit: $5,000 Age: 10months
Bank of America Credit Card - Limit: $1,000 Age: 19months
Capital One Credit Card - Limit: $750 Age: 10 months

I applied for Capital one auto blank check, however I was denied. I then applied for a Bank of America auto loan and was also denied. I applied to Capital one and BOA since I already have existing relationsihps with them and I figured that would help. Wrong. The reasons for denial are not enough types of credit and unlengthy credit history. I am looking to buy used and looking to borrow about 15k. Willing to put a down payment of 3-4k. I would of rather of been prequalified with a check in my hand before I go to any dealer. Should I just go to a dealer and have them help me get qualified instead? Also a co-signer is out of the question.

What I'm afraid of at a dealer is that they'll bully me by offering me high interest rates since I'm young, niave, have decent income for my age, have no other choice. What should I do?

(side note: i guess boa gives out 5k unsecured CC's easier then 15k secured loans)

Honda is running a 0.9% loan up to 60 months for a few new cars (college programs also included). I believe your score of 680 qualifies. You would have to double check they are still offering but it could be worth a shot for you.

The reason you are being turned down is your credit is very new (AAOA= average age of accounts) and not averaging there minimum qualifications. I have to agree with post above that a college program will be your best chances.

Revelate · ‎06-26-2012

BOA is gold-plated only on their auto-loans, not much you can do with them frankly. I've banked with them for over 15 years and I didn't even bother checking .

Capital one is all over the map with auto loan approvals, I don't think it's their core business and they have some wonky underwriting at least judging from posts here anecdotally.

Income and downpayment are fine, you shouldn't have any problem getting financed somewhere, just not with those two particular lenders who are more picky than many. Last two paystubs is really all it takes, and you're putting around 20% down. Someone will give you a loan, and dealer financing isn't the end of the world anyway... you can always refinance in six months, though I agree with the other suggestions of getting some approval before-hand so you know where you stand.

Anonymous · ‎06-26-2012

I think you might need a companion who understands deeply the papers and everything about the negotiations, not exactly a co-signer but should be the one who can intimidate those dealers and sales representatives. You are exactly what they ask for an auto loaner, and the fact that it's your first time can get them so greedy about the deal.