need auto loan advice!

[jj88]

Hi all, I've been a myfico member for some time now and have a problem and after searching online, I realized that I should've just came here in the first place. Last August I went to get an eye exam and my insurance did not want to cover it saying I was not covered under my mom's insurance. After months of calling back and forth, the insurance finally paid but in the mean time the bill from the vision place was turned over to a collection agency. I, thinking everything was resolved, simply forgot about the issue. I factory ordered a new car in March which will be arriving in 2 weeks. Last week I received a letter from the collection agency requesting the original amount plus a collection fee. I contacted them and they confirmed that the vision place got paid by my insurance but I still owed the collection fee (which I have paid today). My fico score is 747 with no missed payments, 14% balance to credit ratio 8 year credit history. The collection has informed the credit bureaus of the delinquent account which I assume will be reflected in my score any day now. Since I have paid they will be sending a request to delete the record from my history which they say may take up to 30 days. With the car coming in 2 weeks I do not have a month to wait for my score to go back up. I requested them to send me a letter confirming that I have paid the debt in full. This will be my first auto loan. Any advice on the course of action to be taken will be greatly appreciated. I never dealth with a collecton agency before this and hopefully it ill be the last time I do. What are the chances of getting a good interest rate? Will a 40 dollar collection make a huge impact seeing how I pay off large amounts on my credit cards? Will the credit bureaus be informed of my "paid in full" collection account in time? Please help!

[Remember0]

Well the collection account if it's there, will hurt. If they don't remove you can easily remove it by doing the hipaa process (google these three words: hipaa whychat guide) since it's a medical collection. Follow those steps exactly. But I'd give it a week or two to see if it doesn't go away automatically since the CA did say they requested the delete.

Honestly with a 747 fico, you should be okay. How much car are we talking about here?

[jj88]

Thank you I will look into hipaa. The car is about 35k and I have an 18.5k trade in and 500 down payment. Please if anyone else has anything to add or advice then comment away!

[Remember0]

I reread this and realized the medical hasn't yet shown up. If you can, I'd try to beat it. So get the loan before it shows up. Check your reports to make sure it isn't there before doing what I suggest in my next paragraph (DCU pulls EQ, BofA usually EX or EQ). You can get a free report once annually at http://annualcreditreport.com . No need to buy your score, just see if there is any information that reports as negative/if the collection shows on the report.

If I were you, apply to DCU tomorrow ASAP. Wait till Wednesday (assuming app on Tuesday), call them and say you're looking to buy this weekend and wanted their help. I'll post their number here sometime tomorrow. But go online to Digital Credit Union and apply. Hopefully they pull your pristine file! Also while you're at it you could try BofA because they do instant approvals. And if it asks for down payment, you want to input the total of trade + cash (unless it's seperate fields). This assumes you have a car worth 18k that has no loan that you want to trade?

[jj88]

that's actually what I was thinking of doing, but wouldn't that only be a pre-approval? they wouldn't run my credit again when I would actually be buying? Unfortunately I can't check my report until October since I last checked it last year in October (by the way, I just received a free credit report update from myFico like 4 days ago and everything still looked good, no collections). I owe 3K on my current car which I will pay off when I go pick up my new car. I know that if I try to get a loan from different lenders within a 2 week period it will all count as one inquiery on my report. How long is the approval good for? Is it at least 2 weeks? Thanks for all your help.

[Remember0]

No, they don't usually pull again. It's not like for mortgages where they pull before closing. Apply to DCU and BofA ASAP! Obviously, don't mention this medical crap unless they explicitly ask you about it (which they won't if your report is clean)!

Typically approvals are good for 2 weeks-1 month. I haven't seen one good for less than 2 weeks.

Also the rule is 30 days, counts as 1 inq. But it has to be coded correctly when the financial institution runs it (Auto). Sometimes it's not. :/

That's fine re: the 3k. Make sure you include the trade's value in the dp figure you put in online when applying! So you really have like a approximated 19k dp (18.5+.5).

[jj88]

I actually already applied for BoA loan and got approved! 2.79% for 60 months and its good for 30 days (it showed experian credit score of 751). I will also apply at DCU soon. thanks for all your help.

[Remember0]

Well, there you go! No more need to worry about the medical. Worst case, you can get 2.79% with BofA. How much did BofA approve you for? Hopefully DCU will write you @ 1.74%! Call them 24 hrs. after you apply btw and just say you're looking to buy this weekend.

Also be sure to keep on top of that medical. If it shows up and doesn't go away by itself within a week, do the hipaa process!

[jj88]

BoA approved me for 16k. I am hoping for the best with DCU. Do I need to open an account with them to get approved or is that once I decide to actually go through with the loan? I will definitely try to get rid of the medical. Once again thanks for your help, I was so worried before all this haha.

[Remember0]

So either way, some prefer membership first, then loan. In your case, getting the approval will most likely be the hangup if that medical shows up. Since we're on a time crunch do loan now imo. If you go through them, yes, you'll have to open the account before loan is funded. But they'll approve the loan without you being a member if that makes any sense? (Also note this may wind up with 2 INQs unless you go into one of their branches in like MA and NH).

Finally ask for a little more than 16k. Say like 18k (just increase price of car to 37k) to cover taxes and in case you get less on the trade than you like.