Jump to content

Please consider disabling your adblocker for CreditBoards if you have not already done so.  This site depends on advertising revenue to stay online.


Sign in to follow this  

Recovering poor credit need help in getting auto loan

Recommended Posts

Hello All!  I am new here and I really need some help.  Back in 2011, I had a foreclosure and a repossession.  Those dropped off my credit reports earlier this year.  Because of those, I haven't been able to get approved for any credit except a car loan with a co-signor (American Credit Acceptance) that I had all good payment history and then paid off in 2015.  I have been driving a lease car from a friend since then, so not in my name and now that friend can no longer provide the lease, so I have to buy a car.  The only other item on my credit reports is a credit card my ex-wife had with my name on it as well that she ended up not paying and settling with them (about $1360).  

 

Just pulled my credit reports.  TU is 617 but both Experian and Equifax has no credit score!  They say it's because I don't have enough credit history, but how can I get any if I can't get a credit card??

 

Anyway, I spoke with Carfinance.com and they use Experian.  If I had a 500 with them, I could get a loan.  

 

I make over $100,000/year but I am self-employed as a consultant, though it is quite regular.  I am looking to borrow between $20k and $25k and I will have $10k to put down.  What is my best approach to go about getting a car loan, please?  I'm really at a loss here, so any help or guidance would be greatly appreciated!

Share this post


Link to post
Share on other sites

If you have a family member/friend with good credit, you could get added as an AU and likely with a 'no history' get a bump that would put you in the high 600s straightaway if they're not carrying a balance - more with an older card.  But working at a dealership, yes, we get loans for people with limited credit all the time.  A lot depends on what vehicle you're looking to get into also.  Getting into, say, a Ford Fiesta, for example, is much easier than a Lincoln Navigator.  If you're able to wait the month and have the AU ability, it would likely help with the problem pretty easily.

Share this post


Link to post
Share on other sites

Here is another route you can go.  Buy a cheaper car in cash for a few thousand dollars.  Nothing extravagant, just a good reliable car.  At the same time, take some of the cash you were going to use as a down payment and open up a couple of secured credit cards, preferably ones that can graduate to unsecured (like Discover, NFCU, BoA to name 3). Give it 12 months of using the cards every month and paying in full when the statement cuts.  In a year, the cards should graduate and you'll get your security deposit back.  Then you can use the security deposits, plus trade in the reliable car you have ben driving as a down payment for the car you want.  You'll also have a much better credit score by that point and will likely qualify for much better financing offers.  Better to take this route then to get into an expensive car now at a very high interest rate and pay thousands of $$ in interest.

 

Just as an example, if you finance $20K (per your post)and get a rate of 15% (it may be even more than this) you'll pay $2,800 in interest in the first year and $8,600 over a 5 year loan.  If you wait and can get a rate of 5% it would be $900 and $2,600 over a 5 year loan...huge impact.

Share this post


Link to post
Share on other sites
17 minutes ago, CTSoxFan said:

Here is another route you can go.  Buy a cheaper car in cash for a few thousand dollars.  Nothing extravagant, just a good reliable car.  At the same time, take some of the cash you were going to use as a down payment and open up a couple of secured credit cards, preferably ones that can graduate to unsecured (like Discover, NFCU, BoA to name 3). Give it 12 months of using the cards every month and paying in full when the statement cuts.  In a year, the cards should graduate and you'll get your security deposit back.  Then you can use the security deposits, plus trade in the reliable car you have ben driving as a down payment for the car you want.  You'll also have a much better credit score by that point and will likely qualify for much better financing offers.  Better to take this route then to get into an expensive car now at a very high interest rate and pay thousands of $$ in interest.

 

Just as an example, if you finance $20K (per your post)and get a rate of 15% (it may be even more than this) you'll pay $2,800 in interest in the first year and $8,600 over a 5 year loan.  If you wait and can get a rate of 5% it would be $900 and $2,600 over a 5 year loan...huge impact.

I agree with this suggestion and logic.  

 

Something like an older Lexus RX350 with 100,000 miles on it easily has another 100,000+ miles of life left, and you can pick one up in the low $10,000s.  

 

We made a car purchase decision similar to this about four years ago (with no credit issues and no practical budget constraints).

 

You might even find that you like the idea of not flushing tens of thousands of dollars down the automotive depreciation toilet.  

 

(I'm starting to sound like my father*  😛 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* who made a great living as the owner of a new car dealership.

Share this post


Link to post
Share on other sites
8 hours ago, cv91915 said:

who made a great living as the owner of a new car dealership.

Special Finance was probably his most profitable section of the dealership, provided he had reliable lenders available to hang the paper

Share this post


Link to post
Share on other sites

Thank you all for the input.  It looks like I may be able to borrow a friend's car for a couple of weeks while figuring things out as long as I can get insurance for while I have it.  In the meanwhile, I will also see if anyone would be willing to co-sign on a loan.

 

Last question... Will I have better luck working through a dealer or trying to get a loan approved ahead of time directly with a lender?  Any thoughts on that?

 

 

Share this post


Link to post
Share on other sites
On 11/24/2018 at 5:20 AM, MarvBear said:

Pick a car out at a local dealer and let the dealer go to work for you.

How successful have you been on your own so far?

Share this post


Link to post
Share on other sites
4 hours ago, Bamaguy said:

Thank you all for the input.  It looks like I may be able to borrow a friend's car for a couple of weeks while figuring things out as long as I can get insurance for while I have it.  In the meanwhile, I will also see if anyone would be willing to co-sign on a loan.

 

Last question... Will I have better luck working through a dealer or trying to get a loan approved ahead of time directly with a lender?  Any thoughts on that?

 

 

I reiterate I strongly would suggest buying a cheaper car and in a year after building your credit then looking for a new car, however, if you are determined to buy something new and finance it then you are best to go to a dealer and let them work on your behalf.

 

Also, if you find someone to co-sign for you, please direct them to this site so we can tell them what a HORRIBLE idea co-signing is for anyone (not including jointly with a spouse).  This advice goes for you as well.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Similar Content

    • By GLW
      Hi Folks - I'm scheduled to close on a new construction home 8/30. The kids start school here in MD on 9/3. They enroll in new schools and I want to get them settled as much as possible. That background might come in handy for the scenario that I'm seeking advice on.
       
      Here's the scenario: purchase price is $439,540. I'm currently doing an FHA loan with 3.5% down. My mortgage credit score is 726. The loan estimate has me paying $300 month in PMI. The issue is that in October I get my yearly sales bonus; at that time I can put down the ~$90K needed to cover the 20% down payment to remove PMI. Questions for those experienced in the industry:
       
      1. Should / can I delay closing for two months? If so should I go conventional?
      2. Should I move forward with the FHA loan and refinance quickly? How soon can one refinance?
      3. Should I move forward with the FHA loan and simply pay $90K on the principal of the loan and reduce the amount to have PMI removed?
       
      Thanks for your help in advance.
    • By DavidMalan
      Hello my name is David Malan i need quick cash car title loan can anyone please suggest me the lender name and number so can i get the loan.
       
      Thanks
      David
    • By James3
      Currently my fiancee and I are looking to buy a new 2018 Ford Edge. She just payed off her car last month (2011 Kia Rio) and are looking for something more comfortable for trips. We like driving to amusement parks to ride roller coasters. I have a 2005 Rav 4 that is not in the greatest of shape also. Our issue is this. She recently was layed off from her job about a month ago. So is collecting unemployment ($1100 a month) Since she recently payed off her car she only has about 250 dollars a month in bills. So was thinking that it would show that she still has the money to make a new car payment. She's looking for work right now but I've told her and we both agree that she should take her time and not just jump into the first job that has a paycheck and to find something she actually wants and for a good wage. I make plenty for us to live on my own and still be able to save money even if she didn't get unemployment. My problem is I'm at the end of chapter 7 just waiting for my discharge. I've already had my 341 meeting and my assest report has been completed. My discharge was supposed to be last month on the 19th but the trustee filed for an extension and my attorney tells me it's because the other trustee has retired and she took on all her cases so is behind. It's currently supposed to be discharged on the 19th of this month (October). 
       
      So do we have any options? Are there any lenders that would give us a loan for a new Ford Edge with her on unemployment? Or if I cosigned with her just for the income even tho I'm in BK7? We have 10% down to put on car and plan on trading her car in as well altho it's not worth much according to KBB (Maybe 2k if were lucky). Her credit scores are in the 600-650s because there is a collection we just found out about for 100 bucks from some medical bloodwork that she had done. Which she had insurance for and was paid by them they said. So were working on getting that off. That was just in september that it went to her report and we knew nothing about it. So being to recent it hit her score hard. Were working on getting that taken off but we've found a great deal on a new Edge (Even tho it's 4 hours away) and were wanting to try to get it. Other then that she had a collection in 2013 for 500 bucks on a credit card. 
       
      Like I said she just paid off her last car a month ago and this was her 3rd car payment she has completed with no lates ever on a car payment from all 3 car loans. The issue is her employment. Even tho she gets enough extra on unemployment to cover the car payment (And I'm covering all the payments anyways) Just wodnering what people think is possible if anything.
    • By rdz
      Are standard down payments required when purchasing with over 20% equity given purchase price is less appraised value (over 20%)? First time buyer as well.
       
      Reading Nerd wallet many Loans require 3% downpayment except Navy Federal.
       
      Thanks for input
       
      Rd
       
       
       
       
      Sent from my iPhone using Tapatalk



  • Member Statistics

    • Total Members
      179,596
    • Most Online
      2,046

    Newest Member
    Blacccoffy
    Joined

About Us

Since 2003, creditboards.com has helped thousands of people repair their credit, force abusive collection agents to follow the law, ensure proper reporting by credit reporting agencies, and provided financial education to help avoid the pitfalls that can lead to negative tradelines.
×
×
  • Create New...

Important Information

Guidelines