"750" FICO not good enough for a car loan

[Robot]

I just got out of a 401K meeting here at work. Our 401K manager had a meeting this morning with the owner of a car dealership and his employees.

The owner of the car dealership said he had trouble getting financing for a customer with a "750" FICO. I should have tried to get more specific details on the situation.

I know many here work with auto and other finance, use to be car loans were easy to get. Anyone have more details?

Sounds like all lending money is tight

Perhaps many "good credit risk" folks will have difficulty financing anything?

 

[tbonebusa]

I call BS.... I have bought 2 vehicles in the last 5 months, 1 just a week ago. I have average credit at best....674 I believe. I had credit approvals from 3 sources within 15 minutes of completing the app. at the dealer.

I also manage a Boat shop...we have financed 3 boats this month, all with scores under 700. What is different now is that your debt-to-income needs to be manageable, under 55points on a rec. vehicle loan. Your dealer guy may be referring to the ultra-low interest stuff...for those you will need 750 FICO's and a DTI in the 40 percent range.

 

[Devil Dog]

Wow...that is crazy......

I would have to see it myself to believe.

750 is pretty good.....but times ARE tough right now.

DD

 

[Mr Bogus]

I call BS.... I have bought 2 vehicles in the last 5 months, 1 just a week ago. I have average credit at best....674 I believe. I had credit approvals from 3 sources within 15 minutes of completing the app. at the dealer.

I also manage a Boat shop...we have financed 3 boats this month, all with scores under 700. What is different now is that your debt-to-income needs to be manageable, under 55points on a rec. vehicle loan. Your dealer guy may be referring to the ultra-low interest stuff...for those you will need 750 FICO's and a DTI in the 40 percent range.

Is exactly what I have been hearing.. credit to debt ratio issues are the big problem.. anything over 50% on a revolving charge account is bad news too

 

[Robot]

Perhaps they tried private vs. Car company financing

 

[twotonevert]

750 is almost perfect credit.

 

[wharthog3]

I couldn't get a loan from the local credit union back in October with a 716 FICO. They said my income wasn't "stable" because it was a commission based income, even though my W-2s for the last 3 years showed consistent income, the 8 previous months averaged out to what I said I made, my current stub showed the same thing, and I have ZERO, yes ZERO late payments ever!

I didn't qualify for ANYTHING, not just a top tier, they flat out said NO.

Pissed me off. Strange thing was, I walked into the car lot I was planning on buying from, they looked at my score, moved their finger over to the box it fit in, and gave me the loan on the spot, TOP TIER, didn't even look at my income, if I had any at all.

So I guess it depends on who's doing the loan and what they consider to qualify.

Also, qualified for the B-King twice over. Suzuki (HSBC) was willing to give me 20K traditional loan and 15K on a revolving card, no money down, so again, guess its how bad they want to make the deal.

 

[Mr Bogus]

yea wait till you see what the Suzuki terms are... it was not a gift ...

 

[shawnski]

not true, i work for honda dealership and we finance all differnt type of credits. 750 is excellent credit score, but you have to understand the detail of 750 score, some might have two pieces of credit card and not estabished enough credit and have a 750 score. in that case it will be harder to get them done.
we still finance everyone with stablished credit from as low score of 500s. your interest rate can varry base on that and some low scores must go through special financing with high interest rates and good money down!

 

[MPH 200]

Like has been said above, there are more than just scores that influence the decision. Debt to income is one of the largest factors. Time on the job, etc. With the way the economy is now due to "high risk" loans it is tough. I pulled mine the other day because I am buying a new truck in a few months & I am an 832.

 

[shawnski]

Like has been said above, there are more than just scores that influence the decision. Debt to income is one of the largest factors. Time on the job, etc. With the way the economy is now due to "high risk" loans it is tough. I pulled mine the other day because I am buying a new truck in a few months & I am an 832.

....and believe me you have a high debt ratio in credit cards and others, your score won't be 750!!!!
friend mine just bought a car last saturday from us and she has excellent credit based on paying on time but high credit card debt and her score was 630.

 

[2k4_8]

As stated above, the biggest thing that goes into a loan is the debt to income ratio. From what I understand the score itself seems to influence the interest rate you get more than anything else. Basically....a high credit score isn't all it's cracked up to be...although it does help!

 

[wharthog3]

yea wait till you see what the Suzuki terms are... it was not a gift ...

Oh yeah, I know "promotional rate" of 15.99 YEESH

Oh well, nothin' down and I'll have it paid off this year so $200 or so a month in interest until the end of the year is acceptable to me if it means I get to ride.

I feel bad for the people that don't understand what buying a bike on a credit card really costs if you plan on trying to pay it off over time.

 

[dadofthree]

That's funny a year ago they would loan money to crackheads, now it's hard to get a loan. We must be in the pooper for sure ...

 

[MPH 200]

....and believe me you have a high debt ratio in credit cards and others, your score won't be 750!!!!
friend mine just bought a car last saturday from us and she has excellent credit based on paying on time but high credit card debt and her score was 630.

We use 1 credit card, Cabella's, for everything & pay in full each month, so no rotating debt. Paid cash for my house. Every little thing helps now.

 

[runeight]

Perhaps they tried private vs. Car company financing

Exactly what I was thinking.

r8

 

[wharthog3]

We use 1 credit card, Cabella's, for everything & pay in full each month, so no rotating debt. Paid cash for my house. Every little thing helps now.

I've heard that creditors actually hate this technique, (they don't make any money then) Whether this helps or hurts your credit I have no expertise to say one way or the other.


With the current state of things I think the chain of "pay it later" maybe has FINALLY caught up with "consumer America"

The biggest change I see NEEDING to happen is our belief that we NEED "things" to make us happy. This idea has been a part of our culture for so long, I don't know if we can separate ourselves from our possessions anymore, but I hope so.

 

[SAMBUSA]

A problem that has been going on around here has to do with trade-ins.

Trade in a vehicle that you still owe on, the dealership agrees to make the pay-off but then doesnt do it or goes under before paying on it. Used vehicle that was traded in gets repo'd from whoever bought it used. And the bank goes after the person that traded it in.

Granted, it's stupid to trade in a vehicle that you still owe on but alot of people do it

 

[GSXcite]

Is exactly what I have been hearing.. credit to debt ratio issues are the big problem.. anything over 50% on a revolving charge account is bad news too

Randy is right on! I'm the finance manager for a large Honda, Kawasaki and Yamaha dealer, and if your debt to income is anywhere near 50% , and you have alot of revolving (credit card) type debt in relationship to your credit limits, you may not get financed with an 800 beacon score. If your debt to income and revolving credit is good, most lenders will give the best available rates to persons having a beacon, or fico score of 720 and up. Some credit unions will give great rates to those approved regardless of your score, as long as you are approved.

 

[skydivr]

GSXcite, what are you seeing in the rates right now with an impeccable FICO and low debt/income ratio?