Help with getting approved for a new Tesla Model X

[Anonymous]

So I have been slowly working on my fico score I finally got a score 2 months ago it was 654. Now I have a fico score of 715.

My average age of accounts is 6 months with 8 months being the oldest.

So to cut a long story short I was denied because of history/length

Current loans

Bank of Hawaii 32,000$ (2019 Prius)
Discover card 500$ limit 24$ balance
Capital one 500$ limit 20$ balance
Apple Card 750$ limit 3$ balance
Self Lender Loan 356$ Balance.

My annual income is 144,000$

Now my question is I can easily pay off my Prius in 3 months. After I pay it off would I have enough history to be able to try again?

Is my fico score bad too?

Mahalo

[Anonymous]

Your FICO score is fine. You were denied for length of credit history. Nothing can fix that except time. The Prius loan is helping your Auto FICO score.  This is the score car lenders use.

Let your average age of accounts get to at least one year. Yes, one full year. Before you try again, you will want to pay down the Prius loan but not completely pay it off. Also save money. If you can put down a large deposit that will help. Good luck.

Now, having said that...I've gotten car loans with numbers a lot worse than yours. But you really don't want a loan for a luxury car with terrible rates. It's better to wait. Those 6 months will pass quickly.

[Anonymous]

Thank you! I will try that. I just hate to owe any kind of money. I would rather pay it off quickly then have a balance.

[Anonymous]

Finances should definitely come before score. So if you feel better paying it off, that's ok too. 😊 My suggestion was merely from the standpoint of squeezing some extra points to help you get approved. But like I said the largest factor affecting you is account age/time. So waiting for things to age a bit is the largest factor right now in getting you appoved imho.

[Anonymous]

Would it be ok and help to maybe pay 10,000$ for 3 months and just leave 3000$ for the rest of the 4 months on auto pay at 520$ a month?

Would having a lower auto loan balance help my fico auto enhanced score?

[Anonymous]

Yes it would help.  Not just your auto scores, but all of your scores.  What matters is your overall installment loan utilization.  So figure your auto loan balance currently as well as your self lender balance, then divide that sum by the sum of the original balances on those 2 loans.  Based on the size of the 2 loans, the auto loan is no doubt controlling the bulk of that aggregate utilization.  The self lender loan can probably just be closed to be honest since you already have an open auto loan (so the self lender isn't helping) and plan on replacing your current auto loan with another one. 

I'd close the self lender loan now, which gives you one less account with a balance.  Then pay your current auto loan down to (say) 5% utilization 1-2 months before you plan on applying for the new auto loan.  This will ensure that low utilization is reported on the current auto loan first.  Then acquire the new auto loan and once you do, go ahead and pay off your current auto loan. 

[Anonymous]

Thanks a lot

[jamie123]

The bigger the down payment that you can make on the new car the easier it will be to get approved for the loan. Cars are almost a liquid asset to lenders. If you don't make the payments there is a whole industry dedicated to repossessing the car and selling it at auction. As long as the lender can clearly see that in case of a repossession that they will recoup their money because your down payment was large they will approve almost anyone. 30% down is a good starting point.

[randomguy1]

I don't think you need a 30% down on a car in this market. Where does that number come from?

[HeavenOhio]

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@randomguy1 wrote:

I don't think you need a 30% down on a car in this market. Where does that number come from?

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The OP has an extremely short credit history and is looking for a loan for an expensive car. Reducing the size of the loan by offering up a larger down payment may give him a better chance for approval.