High income & assets but bad credit score

[DutchPepper]

Hi all, approx. 5 years ago I got into trouble with credit cards and personal loans. I had over 100,000 in collections. I have paid off the vast majority of this and gotten it removed from my credit profile. 

 

However I still have 2 major items. One is a collection for 35k, for which they've filed a lawsuit. I have retained an attorney and they are working to get this settled. The other are credit cards which are about ~10k with Chase, and they are very close to ageing off (about 18 months left). 

 

Now my FICO is around 650. But my income for 2021 was close to 850k on my tax return, 2019-20 was around 600k each. I also have about 250k saved in assets (various investments). I currently also save 20k a month into invesetments, and have a track record of doing this every month for the last 6+ months (once I paid off all my various debts). 

 

I am trying to buy a car around 100-150k. But I get auto-dinged on every pre qualification based on credit. What is my best course of action here? My longest banking relationship is with Chase but because of the credit cards they won't offer me anything. 

 

I was thinking to move this to some wealth advisory fund where they will give me a securities-based loan but even then I am not sure how credit plays into it. Any ideas?

[MarvBear]

Could I ask why you don't just pay cash for the purchase?

[DutchPepper]

That is an option, but I would like to maintain my cash reserves for emergencies, etc. I actually thought I could do without a car for this year and was expecting to have close to $1 million cash by end of 2022 and by a car then, but of course my car broke down like 3 days ago and now I am searching to find something quickly. 

[MarvBear]

Dealerships always have a lender that will finance almost anyone regardless of prior credit.   You may not like the terms and conditions.  Be prepared to supply a lot of documentation and a large cash down payment.

[centex]

That price range tends to suggest you are looking in Aston category or perhaps used McLaren, Ferrari, Bentley.  After all, even a new Lotus, loaded, can be had for more like $105K.  I contemplated leasing a Lotus right before the great 'rona shutdowns, and they were going through Chase.  However, doing the math on the money factor revealed it to be a horrible APR that approached 8%.  And right after the shutdowns, I decided to set the purchase to the side until I could figure out what our office inflows would continue to be (being in law, things still go on even while people sit back at home eating bon-bons and watching cat videos).  Instead I just kept shoveling money to burn the note on the F-Type that I had bought a few years earlier. 

 

You never want to shotgun to the routine online lenders for those sorts of vehicles.  They HAVE people who they work with and would have kept you from being hit with the inquiries and denials.  And with vehicles in that strata, you ALSO learn about alternative insurance providers who won't look to screw you with the premium...my primary carrier wouldn't even QUOTE the Aston AMR I had been contemplating and also would not quote the Lotus. 

 

That said...given your claim on resources, seems you might also want to consider a share-secured loan.  Stick $150K in a CD and borrow against it.  Income will be non-existent for the few years, but the loan will also be in the 2-3% range...

[DutchPepper]

2 hours ago, centex said:

That price range tends to suggest you are looking in Aston category or perhaps used McLaren, Ferrari, Bentley.  After all, even a new Lotus, loaded, can be had for more like $105K.  I contemplated leasing a Lotus right before the great 'rona shutdowns, and they were going through Chase.  However, doing the math on the money factor revealed it to be a horrible APR that approached 8%.  And right after the shutdowns, I decided to set the purchase to the side until I could figure out what our office inflows would continue to be (being in law, things still go on even while people sit back at home eating bon-bons and watching cat videos).  Instead I just kept shoveling money to burn the note on the F-Type that I had bought a few years earlier. 

 

You never want to shotgun to the routine online lenders for those sorts of vehicles.  They HAVE people who they work with and would have kept you from being hit with the inquiries and denials.  And with vehicles in that strata, you ALSO learn about alternative insurance providers who won't look to screw you with the premium...my primary carrier wouldn't even QUOTE the Aston AMR I had been contemplating and also would not quote the Lotus. 

 

That said...given your claim on resources, seems you might also want to consider a share-secured loan.  Stick $150K in a CD and borrow against it.  Income will be non-existent for the few years, but the loan will also be in the 2-3% range...

 

Yes the last point is what I was considering as well - securities based loan which I was mentioning. Thanks I will likely go with that approach.

[hegemony]

just pay cash. We have a lot more than that tied up in cars/trucks and I can't imagine ever borrowing money if I have cash sitting around earning .55% APY.

[direct]

Here is what I suggest.  Pay cash for a practical car like a Honda or Nissan in the $40k or under category.  Hang onto it for the 1.5 years that the Chase account will take to fall off your credit report and when your lawyer settles the other debt, make sure a pay for delete is part of the agreement.  So, in less than 2 years your credit should be well above the 700 level and you won't have an issue getting the car you really want.