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Smart Shopper Credit Scores and Vehicle Financing
945 messages, Last post on Dec 06, 2009 at 9:30 AM
You are in the Smart Shopper Forum. Your Hosts are kirstie_h & tidester
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Replying to: ingridr (Mar 15, 2005 1:37 pm) In order to get out of sub-prime you will have to bite the bullet and pay higher rates to reestablish your credit. You can try your bank, but typically they do not do sup-prime lending so you may be stuck with what you've got already. Don't be afraid to let the dealer try too as they will have more than one lending institution to deal with and can usually secure a better approval than what you can find on your own. Are you a member of a credit union? They are easier to get along with in a lot of cases and your rate would probably be lower through one.
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Unfortunately I bank at a traditional bank. However, I work as a government employee and I know that we are affiliated with a local credit union. I will have to check with HR to see if they have any info on potential loans through that credit union. Are credit unions more willing to lend to sub-prime buyers versus traditional banks or is it dependent on the bank/union and person applying? Should I be concerned with applying at too many institutions (ie more inquiries on my credit report)? Also, will my utilizing a sub-prime loan (and responsibly paying it off) specifically help me in the future with car loans or will it in a general sense just improve my credit rating which will than improve my chances of not being considered sub-prime? Sorry for all the questions - can't tell I am a lawyer 
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Replying to: ingridr (Mar 15, 2005 1:54 pm) You definitely don't want to run too many inquiries in a short period of time. I would say to check into the credit union first, then try a dealer, if all else fails you have a pre approval in hand already. As far as rebuilding your credit rating, it won't matter where the loan comes from as long as it reports to your credit. Ask about that at the credit union because not all of them do. If they don't than you will not be helping yourself in the future by saving a few dollars today. Feel free to ask questions. I may need a lawyer someday. |
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Replying to: ingridr (Mar 15, 2005 1:54 pm) Many years ago, we were in a similar situation as my S.O. had just moved to the United States - he had no credit history at all here, but had a job and had started to establish a few credit cards. Still, his credit score was way low. We worked with some dealerships and we were up-front about our credit situation. The F&I guy at the store was extremely helpful, and talked with Volvo Finance to approve us at a reasonable rate (~7%) for any used vehicle with under 60K miles. Obviously, everyone's situation is different, but if you go to a dealership, the most important thing is to be honest with them like you have been with us. They will be more willing to go the "extra mile" to try to help you if it is clear you're not trying to be deceitful. |
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I am no expert but I got financing 2.5 years ago via Toyota Financial with a 605 credit score. The interest rate was 12% but I refinanced with my CU within one year and got that knocked down to 5.1%. I was approved from Ford with a similar score for up to $33K. The mortgage on your credit should definitely help since that counts as a major purchase. I beleive Ford, GM, and Chrysler will offer you a rate of no more than 9%, which is high but not as high as 16%. Good luck. Please let us know how things work out.
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Replying to: ingridr (Mar 15, 2005 1:54 pm) I found some useful info on the impact of inquiries here. There are some allowances made for several inquiries over a 2 wk period when auto or loan rate shopping. See the "What to know about rate shopping section". http://www.myfico.com/CreditEducation/CreditInquiries.aspx?fire=5 Hope this helps and good luck!
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Replying to: macarshopper (Mar 16, 2005 12:48 pm)
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on your offerred rates. We got a mailing from our (former) mortgate /(current) car lender with an offer of $50,000 pre-approved out of the blue in Dec. This was while I was "between jobs" too. The only reason I can think of was our credit score and history. When I called them about it it was for real (ended up spending about $35,000.00 at 4.3%) not "great" compared to some "new car" rates, but this was for a "pre-owned" car and I didn't have to bother with F&I at the dealership.
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Thanks for all the info/advice! I am printing it out and following up on it. Keep it coming 
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Replying to: kirstie_h (Mar 16, 2005 1:45 pm) |
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