High utilization while searching for auto loan

[kremonis]

I am an active credit seeker though I been gardening for about 1.5 years. Normally the CC balance is paid in full before it hits the big 3 CRAs. This is to keep my utilization always low just in case an opportunity pops up to apply for a new CC.

About 3 months ago a money making opportunity presented itself that I took advantage of, by spending on several credit cards. The only catch was I would have to carry a balance, well into the grace period, and allow those balances to hit the CRA's. CC are being paid off in full before the grace period ends to avoid interest PMTS.

My car got totaled and I need an another auto loan from NFCU. My utilization is high with NFCU(about $8400) and $6000 evenly split between two other non NFCU CCs. Because of timing, no payments I make would be reflected on any CRA for a month.

I do have the means to pay to NFCU back right now but that would require me to pay money from a high interest account. If the damage is done to my utilization than I would rather earn dividends.

How much would my high utilization likely affect the rate and amount the NFCU may be willing to lend me? If I pay off the NFCU CC would that make a difference before applying for an auto loan?

[SouthJamaica]

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@kremonis wrote:

I am an active credit seeker though I been gardening for about 1.5 years. Normally the CC balance is paid in full before it hits the big 3 CRAs. This is to keep my utilization always low just in case an opportunity pops up to apply for a new CC.

About 3 months ago a money making opportunity presented itself that I took advantage of, by spending on several credit cards. The only catch was I would have to carry a balance, well into the grace period, and allow those balances to hit the CRA's. CC are being paid off in full before the grace period ends to avoid interest PMTS.

My car got totaled and I need an another auto loan from NFCU. My utilization is high with NFCU(about $8400) and $6000 evenly split between two other non NFCU CCs. Because of timing, no payments I make would be reflected on any CRA for a month.

I do have the means to pay to NFCU back right now but that would require me to pay money from a high interest account. If the damage is done to my utilization than I would rather earn dividends.

How much would my high utilization likely affect the rate and amount the NFCU may be willing to lend me? If I pay off the NFCU CC would that make a difference before applying for an auto loan?

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IMHO you should pay NFCU back right now.  The interest rate you will get on the auto loan will be affected by your high utilization.

[AutisticPretzel]

Unfortunately, it's kind of hard to say whether you paying your NFCU credit card and/or other balances down would make a noteable difference in your potential interest rates because you didn't mention what percentage of UTI is being used. If your CL is $10K, then yes, $8400 is high but if you have a $25K+ limit, all of a sudden that $8400 isn't as off putting.

For what it's worth, as long as everything else with your profile is in order (no lates, no derogatories, decent age of credit, decent transactional history with NFCU, low amount of recent inquiries), higher UTI on a card or two shouldn't make a noteable difference in your interest rate with NF.

I recently applied for a auto loan with NFCU and was approved - But with a 10.64% rate with a 735 FICO. I had opened about 14 accounts over the previous 6 months, so the rate reflected that which I understood, especially with 3 of those new accounts being with Navy Fed themselves. I went over to USAA and got 5.94% APR/75 months. My UTI was only at 2% overall.

Hopefully you're willing to keep your options open as far as lenders go because NF doesn't always offer the best rates - Even for profiles and credit scores that you think would warrant it.

[kremonis]

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@AutisticPretzel wrote:
Unfortunately, it's kind of hard to say whether you paying your NFCU credit card and/or other balances down would make a noteable difference in your potential interest rates because you didn't mention what percentage of UTI is being used. If your CL is $10K, then yes, $8400 is high but if you have a $25K+ limit, all of a sudden that $8400 isn't as off putting.

For what it's worth, as long as everything else with your profile is in order (no lates, no derogatories, decent age of credit, decent transactional history with NFCU, low amount of recent inquiries), higher UTI on a card or two shouldn't make a noteable difference in your interest rate with NF.

I recently applied for a auto loan with NFCU and was approved - But with a 10.64% rate with a 735 FICO. I had opened about 14 accounts over the previous 6 months, so the rate reflected that which I understood, especially with 3 of those new accounts being with Navy Fed themselves. I went over to USAA and got 5.94% APR/75 months. My UTI was only at 2% overall.

Hopefully you're willing to keep your options open as far as lenders go because NF doesn't always offer the best rates - Even for profiles and credit scores that you think would warrant it.

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@AutisticPretzel 

I went a head and paid the NFCU CC off then applied for an auto loan after the payments posted. Utilization for one was just below 30% and the other was 60%. Also I am at  29% UTI and 38% UTI at two non NFCU CC.  My scores are comparable to yours. I have been in the garden for about 1.25 years. I curbed my credit seeking behavior for the approximately the past 15 months.

DP: NFCU pulled TransUnion for my auto loan. That is good because TransUnion is the least pulled CRA for me. Loan is for between 6% and 7%. Not bad, but higher than the last NFCU car loan I got.

If the NFCU auto loan people don't internally communicate with the NFCU credit card balance people then the terms of my auto loan would have been base only on my credit report. If the was the case I would have been better not paying the credit cards immediately and leaving the cash in my high interest account to collect more dividends.

This also changes my modus operandi since I got my car loan and no longer credit seeking(I am staying in the garden). I might as well allow my balances to hit my credit report and pay of the CC near the end of the grace period. That way I earn more interest dividends on the cash.