What can I expect for auto loan?

[Anonymous]

Hi! I’m looking to get a new car loan this year and I’d love to hear all of your advice on this.

First off I want to say that for the last month or so I’ve been lurking here learning as much as I can before making my first post. This is such an amazing tool that has helped me take control and lose my fear of credit. Everyone here is so helpful and positive towards each other!

For all of my life I’ve had a terrible relationship with credit. When I applied for my first loan when I was 19 I’d learned that my mother had charged off two credit cards she’d added me on as an authorized user. I received my first real card when I was 20 and promptly ran up the balance and got behind fast. I’d basically be using loans to refinance other loans, trying to keep my head above water. In 2004 I had my car repossessed. I did not touch credit again until 2012 when I took an emergency subprime loan out to get a new car. In the past 7 years I’ve made the payments but accumulated some 30 day notices along the way.

I was really afraid of credit and my lack of control with it. Back in September I decided it was time to bite the bullet and got myself a secured Cap One card with a little $200 limit. Having access to their credit monitoring software now I started checking it obsessively. I started in September with a 525. I started reading every little way I possibly could to raise my score. In February they raised my limit to $500 and my score had climbed to 620. But, in reading all of the posts here I realized that that score wasn’t accurate and I needed to find out my FICO score.

Imagine my shock, when I pulled my report from Experian that my score was a 722!

I immediately applied for (and was accepted) for two more cards (a Discover Chrome It with a $1,500 CL and a Cap One Quicksilver One for $500).

I was feeling really great about this, and so I tried using the Cap One Auto Navigator prequal tool and was denied. When they sent the denial letter they said too few accounts with balances.

I’ve looked at a couple of pre-qualifier sites for car loans (just because I didn’t want to have any hp’s) and was not accepted by any except Carvana.

My subprime auto loan will be up later this year and I’d really like to get a new car at that time. I’d love to get a new Toyota Corolla or Camry then.

I don’t plan on abusing these cards. I’ve been very careful to keep the total usage of all three below 10% and paying them off each time I get paid.

If I maintain this plan for 6 months what are my chances on getting approved for a brand new car loan with a decent rate? I’ve already started saving for a down payment (around $3k is my goal) as due to a large raise at work in January I have more money available to me. I’m so worried that those 30 day late payments are going to preclude me from getting approved or a rate that’s affordable.

Thank you in advance for any responses and for reading my story. For the longest time credit has been a real dark secret of mine so typing this all out felt very therapeutic.

[Remember0]

I think you'll be fine in 3 - 6 months. Let your new cards report and maintain a low utilization on the cards. You'll definitely want to garden for the next 3 months, but maybe if after that you come across 1 card you really like that is beginner friendly, you can consider applying after the auto loan.

FInally I'd recommend looking at DCU in a few months for the auto loan. If your FICOs are in the 700s, they should be able to approve you at their lowest rate of 4.24%.

[Girlzilla88]

I agree I would do an Auto loan with your Credit Union for the best possible rate then turn around and take it to the Dealer you wish to get the new vehicle from if you go to the dealership and apply they can try with 3 to 5 up to however many they feel like and that could potentially hurt your credit for several months more than if you just did the one hit with your CU, if you don't like their offer then of course try with others but at least that way you are taking it one at a time and whatever you do do NOT apply for a bunch of different places or different dealerships after 14 days you want to keep it as close together or if possible at ONE dealership so it does less damage for you and you can potentially consolidate it if need be down the line.