If anyone remembers, I applied for an auto loan with my CU. Approved for only 15K, needed 25. One Ex, 686 score, 14 mo history, 1 charge 1200high/paid in full after 3 mo. 2 CC at 30 percent usage, never late for 12 - 14 mo. No negs. Applied with Lending Tree, 1 bank, Transouth, denied, and People first denied because they already had an application on me, which was approved this morning. Why now is People First trying to rape me? I applied with them, Approved with Ameri Credit Financial $22400 max loan amount, I could work with that. 60 month terms, okay until you consider...... 20% interest Rate!!! Comes out to 600 a month payments! What do I do now? E-loan,? Household (god forbid, but they can't be any worse than Ameri Credit, can they)? I wanted to walk into a dealership with at least a decent (12 to 14%) approval, then see if maybe they could beat it. At the way things are looking, I just don't know. Advice Please? Everyone keeps pulling Experian on me, and a previous auto loan from 9 years ago doesn't show up on that, only Equifax, and nobody is pulling that. TU is shot, if they pull that I'll get offers for 33% interest, LOL. Even if I got just a 14% or so loan, and the dealership couldn't beat it, maybe I could suck it up for 6 months or a year, and re-finance at my CU. But 20% is rediculous, I won't do it. Geez, maybe I should apply for a couple more Cit cards, and charge the whole thing, LOL!!! But that's out of the question, I won't put anything relating to the purchase of my auto on my Citi Card, as I know eventually it would only mean trouble for me. Thanks, danrs
quit applying for those loans, those places are rip-off's dealers can get you better financing. You're doing more harm than not. Find a credit union if at all possible.
Prehaps listen to your credit union and buy a 15k car instead of a 25k one. The best way to accumumlate assets is to drive the least amount of car you can get by with. The depreciation on new cars is fearsome and think how much lower your paymnents as well how much interest you'll save with a less expensive car. You can save a lot of money by separating needs from wants.
Re: Is My Credit THAT BAD? 20% on A Actually the Citi card would be perfect for it. They basically give the 6.9% fee-free BT deal for 6 months to almost anyone, and then you can extend it for another 6 months ("R" has told me so). Use it for the first 12 months at 6.9%. Then, one year from now, your credit would probably be much better and you can refi even w/ an unsecured loan. Saar
Re: Is My Credit THAT BAD? 20% on A Well, don't take 20% whatever you do. A dealer can do better than that.
Re: Is My Credit THAT BAD? 20% on A Well, For now I'm going to stop trying for non-dealership pre-approvals I guess. My credit, apartently, is just not substantial enough. What I'm doing now is e-mailing all the dealers I think I can work out a deal with, and asking which reports they pull. Hopefully I can get a couple to respond and they'll pull a good report, or my best report, Equifax. If push comes to shove, I may have to put 4K or so on my Citi card at 14%, and maybe that'll get me a good rate at a dealer. I have 2K in cash, so that would make 6K down. Once I sell my current car, I can pay my Citi card back about 2K. It would have to be better than that lame a$$ 20% garbage. I'm open to any other suggestions if anyone has any though! danrs.
Re: Is My Credit THAT BAD? 20% on A As bad as they want to sell cars right now, I would think you could go in and tell them what it would take for you to go home with one of their cars.
Re: Is My Credit THAT BAD? 20% on A You pay your bills, so don't go for anything less than best market published rates!!! I once knew a couple who bought a used Acura with high high interest rate, the payment was $900/mo. And the car was previously totaled so it gave lots of trouble. They would have had to pay thousands of dollars just to trade the car in (upside down). keep trying..wait if you have to. You deserve best rates.
Re: Is My Credit THAT BAD? 20% on A Yes, I do pay my bills, wouldn't you think I could get a decent rate? GRRRRR! I guess the only 14 mo history is really hurting me though. Anyway, I got an e-mail back from one Toyota dealer, who says they pull Experian for Toyota Financial Services, but they could also pull Equifax and get the loan elsewhere if I want them to. Equifax only shows 14 month recent history as well, BUT, also shows an auto loan I paid off 9 years ago, so that's gotta be better, right? Maybe there is hope. I would think the dealer has a lot more incentive, especially now, to get me approved somewhere at a decent rate than a bank or Credit Union would. danrs
Re: Is My Credit THAT BAD? 20% on A If you don't have any derogs, and the short history , you fall into the "first time buyers" program. I assume you have no previous car purchase. The first time buyers program typically requires a stable job, residency, and depending on the $$$ of the car you are buying, is an okay deal. Typically a decent credit buyer will get 6-9%, First time buyers are in the 9-11% brack. They will usually want a significant down payment (10-15%). Example of friend's purchase: 20 year old, less than 1 year total credit, 1 year on job, 1 year at residency. Credit score decent (640's). No derogs, No previous auto purchase. VCI (VW) financed a brand new $23K Jetta @ 11% with $3500 cash(or credit) down right under $500/month. This person will re-fi before the car rolls into the next auto-year, probably into a 7-9% rate. Cars of lesser demand of course will get better incentive rates to get you in, But thats a very reasonable offer, for a reasonable situation, and for a decent car for a 20 year old.
Re: Is My Credit THAT BAD? 20% on A How does charging 20% over 12% make you a better credit risk? ------------
Re: Is My Credit THAT BAD? 20% on A It doesn't "make you a better credit risk" -- it covers their butt in the event of a default. For example, if you pay it on time for 16 months @ 20%, then defaulted, they'll make more money during that 16 months than if you payed on time for 16 months @ 12%. Basically, they're trying to get their $ up front, before a bad credit risk dumps on them.
Re: Is My Credit THAT BAD? 20% on A Yeah but what makes them think that if you won't pay at 12% you will pay at 20%?
Re: Is My Credit THAT BAD? 20% on A The 20% or 12% has nothing to do with risk. It's the means for the lender to make money. Let's say they have $100K and they want to earn 12% profit a year. Also, there are 10 people who want $10k loans. Remember they don't care about you. They think of people as groups and categories, but mostly they think of profit. Ok. So let's say the 10 people are poor credit risks. In fact, statistics say that 4 will default, but they can recover the car and come out even. Then they need to make the money on the other 6. So they offer then the 20% loan and make their 12% profit. Now, let's the 10 people are good credit risks. In fact, statistics say that almost none (less than one) will default. Then they can make their profit on 12%. Now this was awfully simplistic but I hope helps. cjd
Re: Is My Credit THAT BAD? 20% on A That's my point. They make more money by ripping you off for 20%!
Re: Is My Credit THAT BAD? 20% on A You're missing the point. Scenario: Borrower A is a bad credit risk. This doesn't mean that he WON'T pay AT ALL -- it means that there is a greater chance that, AT SOME POINT, he may not repay the loan. So Borrower A gets approved at 20%. Borrower A makes the first 15 payments of a 60 payment committment, then quits paying. The lender made more money during the period that Borrower A did make his payments than if they had charged him 12%. THIS 'more money' helps bring the lender closer to recouping their loss than if they had charged Borrower A 12%. Borrower B is a GOOD risk. He gets 12%. Because Borrower B is a better credit risk, he is MORE LIKELY to CONTINUE to make his payments than Borrower A. The lender needs to worry LESS about Borrower A making his payments and, hence, eliminating the potential for the lender having to take a loss in the event of a default. The lender has to worry MORE about Borrower B. The lender doesn't stay in business if it cost them money to lend money. If Borrower A is a GREATER credit risk, then he gets charged more interest (aka more cash flow UP FRONT, during the first part of the repayment period) to offset any losses that might occur with Borrower B. It's all about risk and the chances of the lender getting repaid, and what the lender does to lessen the lost of $$ in the event of a default -- which, again, is GREATER with Borrower A than Borrower B. THAT is why those with greater risk (aka a bad credit repayment history) get charged more. It's not about MAKING more money -- it's about making efforts so that it doesn't cost the lender money to give a loan to someone.
Re: Is My Credit THAT BAD? 20% on A one more thing to point out that relates to the original post. There are lenders that specialize in higher risk loans, just as there are lenders that specialize in low risk loans. They don't give you good rates no matter what your credit is. cjd
Re: Is My Credit THAT BAD? 20% on A Don't waste your time with household, peoplefirst. Household approved me for 14.5%, i walked with 7% from the dealer through chase finance.
Re: Is My Credit THAT BAD? 20% on A Point is A gets ripped off when he pays off the loan off un like B.
