Refinancing Auto Loan

[Deltadog03]

Hey everyone!  I have been reading over the threads, and I am pretty sure I know the answer but wanted to make sure.  My wife and I got a really good deal on a Dodge Journey last May.  Credit scores have been around 560 or so.  BK discharge for me back in late 2012  Now, I have 5 baddies dropping off my CR by June.  My scores, according to my Barclays account are at 604.  Current CCD Util is like 96%, but is about to be down to 1% *for optimal scoring from the FICO gods*  Should I see a big jump when that all updates on the CR?  Plus when should we refinance the loan?  Wait for the baddies to drop off, plus it will be a full year since we had the car, or go ahead and do it after the UTIL goes down?  Thanks everyone!!

Chris 

[StartingOver10]

IMO it would be best to wait until you pay down your cc utilization so you are in a better position to negotiate with the F&I guy. Get in the best position you can be in when you are taking on a long term installment loan so you get the best rates and terms.

Have you pulled the 3 bureau report here since last week?  The new reports show auto enhanced scores (and mortgage and bankcard scores) for 2 bureaus in addition to your FICO 08 scores. My auto enhanced scores were substantially higher (+31 points on Auto Score 8 and  +62 points on Auto Score 2 for one bureau and not as dramatic on the other).  I only mention it because if you are working with a lender using Auto enhanced scoring, knowledge is power when you are negotiating for your new deal. BTW, the Barclay's scores seem to run lower than the FICO 08 bankcard scores IME.

[Deltadog03]

Thank you for the reply.  All the reports will update by the end of FEB with the 97% CCD Util NOW, down to 1-3% CCD  Util.  Should I go ahead and do the refi then?  or wait until June until the 5 baddies fall off?  Will it make that much of a difference with regard to score?

[SamsungHDTV]

Its really up to you. But in my opinion, you should always refinance when 1) your credit significantly improves and 2) you think you can get a better rate than what you have now. This could mean your util going way down, it could mean when your bad marks drop off.

The main thing to consider is that the cost of a refinance is an inq on your report. There are no closing costs, so you could refinance every month if you thought you could get a better rate if you didn't mind taking an inq.

If you refinance now, I would assume you would refinance again when the baddies fall off because I think that your scores will go up. You will save a few months worth of interest at a lower rate.

I hope that wasn't confusing.

[Deltadog03]

oh no, not confusing at all!  Thank you everyone for the advice.  I did my EQ (should be my lowest score) and its 589, but when my UTIL goes all the way down, it "simulates" that I should be at 619.  My AE FICO EQ is 614 now, I am assuming that will go up as well?  Do you think the 5-6 baddies that are falling off will be that big of a score increase?