fortytwo

Last try tomorrow with Penfed! Gonna cross my fingers.

And trust me once this is done, I will join buddy

cloverfield

Keep in mind there are a couple types of credit scores. Since you're in California, most likely dealers are pulling your Experian score (as opposed to Equifax or TransUnion), which then goes through FICO's scoring algorithm to give a numeric snapshot of your creditworthiness. It doesn't stop there, because many lenders use "auto-enhanced" scores which heavily factor in previous installment payments, such as those you would encounter with previous auto loan history.

Since you don't have much of that, the risk model changes and one of the methods of approving the loan is to put down a large downpayment. However, if you do not agree to the terms and cannot find a car or loan to your liking within 30 days, several other things begin to happen:

Inquiries into your credit can hurt your score further, especially if there are several of them in a short period of time. FICO scoring methods generally treat any inquiry from a dealer or vehicle financing company within a thirty day period as one "hard pull" - meaning if you apply to multiple credit organizations (or even if you apply to one dealer and they farm the app out to ten different lenders) - it will be treated as "car shopping" and your score will not drop. However, and generally speaking, after that thirty day period, each inquiry will register as a "hard pull" and will negatively affect your score. "Hard pulls" differ from "soft pulls" that your current creditors perform, sometimes monthly, to monitor your credit situation to ensure you're using credit wisely. These practices have only been solidified since the recession, since may people were "piggybacking" on friends' and relatives' good credit to secure loans they would have otherwise been disqualified for. It's harder to secure credit now, and your use case is a perfect example of an outlier in the process. Btw, each inquiry remains on your credit for two years and continues to factor into your score, albiet less each month going forward.

Bottom line, TL;DR, if you don't get a car soon, the likelihood that you'll find an attractive loan dissipates the longer this process drags out.

hyperion667

tell 'em to **** off, find another dealer

farhadahmad

damn 7% isnt that high?

I am Jeff

I got the same response from Bank of America when I applied for my first car loan. They would not give me a 35k car loan at 2.99%. Their response was that I have never held a car loan, despite the fact that my credit was stellar (800+). I went with the dealer financing route and got the loan from them at 5.75% and refinanced a year later after I was able to establish a car loan history.

It sounds like a load of BS, but that's apparently the way the banks operate.

jvanbrecht

Keep in mind another option, is to get MB dealer to reduce the down payment to 10%, which is a typical down payment anyways. Even at a higher interest rate. Make payments for 3 or 4 months, then go find a credit union or another bank offering decent rates and refinance.

This will do 2 things. First, your next loan will be much easier to come by, even though you only have a small payment history. You will also get a much better interest rate.

A side benefit, at least when it comes to the automated systems used by the credit scoring systems, is that you will have payed off a major installment loan in a short amount of time, this looks good on your credit report. Obviously you have opened a second loan, and when a person looks at it, they will know that you refinanced, but that won't hurt your record, since the score is typically generated automatically.

fortytwo

Update: I applied at Penfed for 60k new auto loan.

Response within 24 hours apparently.

CoolBDPhenom03

Good luck!

fortytwo

UPDATE: On the phone with Wells Fargo. Looks like the "banker/teller" that did the application didnt enter the VIN number and any notes or background regarding the car.

Which is english for "that dude didnt ****in care at all".

I'm on hold right now, just dealt with someone asking me a lot more information (income, why this one, what job do I do etc). He's trying to get me approved for the 60k loan.

fortytwo

Thanks man, I'm crossing my fingers.

I was in your city Sunday afternoon

SheryarYO

if they do approve you, don't do anything until you hear back from penfed tomorrow. I remember wells fargo saying their rates START at 4.99 to like 18%. i'm almost sure that penfed will get you for 1.99% or less (I think they have some sort of deal going on right now for 0.74% on new cars).

fortytwo

Okay so round 2. The woman from the other end still wants a cosigner and won't do anything.

The guy is trying to figure about a secured loan and gonna ask her about it. Once I get back to him, gonna try to see the maths.

I also told them I'd move all my money away (there's more than the loan amount on this one) to Penfed account if I can't get approved.

On hold again.

fortytwo

Update:

They won't move. The guy put more info and asked it to be reviewed again, really sounds like he trying whatever he can.

In the meantime, I got "turned down" by Penfed as well. There are no comments, I'm going to try to call to get some info.

_timothy

did you tell either that you were willing to partially secure the loan??

fortytwo

I did. Wells Fargo wants a crazy high number (I believe 95% of the loan) which is not going to happen.

I just sent a full email to Penfed regarding my application regarding my income and everything on Earth I can mention.

I will hear back from Wells Fargo again on Thursday, the guy is really trying to push like crazy, took the time to learn what kind of person I am etc. It was really refreshing.

I offered to up their interest rate of 3.29% all the way to 5% also.

_timothy

well, that is surprising. i would have thought 25-50% would have been sufficient based on your description of income and credit. securing your own loan is a very common credit building exercise.

try JPM. they ignore their risk models all the time LOL

fortytwo

Yeah, even the guy moved on with the secured loan "doesn't make any sense, so let's forget this".

I asked if it was because the first guy messed up the application, but he doesn't think so.

I think I exhausted every option possible. I'm gonna apply for another credit card and try again for a loan in 1 or 2 years.

My credit score just went down to 713 after the Wells Fargo offer. Ouch.

I'm so freaking defeated. But I don't want to accept any offer, it would put me in an irresponsible position with a huge hit in my savings.

AMG 17GT

Pen fed will decline. .......

You need credit history. Your a " ghost" in the financial world with one year employment at current time.

The most important criteria is your a renter and not an owner of property. Vid you had a mortgage for a couple of years it would have been done. U need some roots in the ground man.

biglee73

Save up your money and see if you can get the dealer to drop the price a little if you pay all cash.

fortytwo

Yeah, but it's not something I want to do unfortunately.

CoolBDPhenom03

Bummer. Sorry to hear that. Definitely give them a call. It's not hard to reach a real person at PenFed.

fortytwo

Tried twice, they say their loan officers are too busy.

Got redirected to info@hq.penfed.org. Will see if I hear back from them.

Keep getting the same need a cosigner thingy, even though I have one with more income than me, he doesn't have enough credit history as well.

Weird to not be able to control your "own" life.

CoolBDPhenom03

Hmm, I've never had that issue with reaching them. Is there no one willing to co-sign with a longer history?

JonMBZ

Why don't you just buy another used cheap car and pay it off in a year then sell it. My first car was a used 325i and it was about 20k. I put 10k down paid it off. I got my C55 which was like 23k and a brand new e-class lease which was about 55k in the same month with like 2% on the new car and 6% on the used car. I also was only making 50-60k at the time with a lower credit score. I only have a 720 now. I don't think it really matters what you make, but rather the history.

fortytwo

Unfortunately no. Family is leaving overseas.

My friend is someone I worked with at previous company and we're actually roomies now. Only person that I "know" (well, that knows "me" in that case) willing to.