o Family y, Credit score, Interest rate, Loan, Mortgage loan, Personal FinancePaul asks…
I have had some problems with my credit over the past couple years due to a job related situation and my wife not being able to work. However, I have worked very hard to raise my score. It is now at about 600. Since I have 2 babies, I need a larger vehicle. I want to purchase a Nissan van, needing a loan at about $18,000 to cover my current trade in, taxes, etc. I do have about $5,000 to put down. What kind of shape am I in? Should I be able to get approved and what kind of rates? I don’t have a mortgage payment or rent or anything. I have a house we live in free of charge given to us by my Dad. I just have a current car payment (which I will be trading in), 2 credit cards that I pay about $300 on each month total. My gross income is about $3K per month before taxes. Please help as I really need some honest advice.
Go to FICO’s website:
It shows in there that with a score of 620 or so you will get an APR of 7.465% for 36 months and your monthly repayment will be $91 for a 13k loan.
Hope that helps.
Charlie asks…
My fiance’s credit score is 575 (ish). He has a mortgage but nothing else currently on his credit. The low score is due to old debt that has since been paid off, student loans, and late mortgage payments. He hasn’t had a late payment in more than 6 months now.
I have a credit score of about 600 which I have been trying (with no luck) to raise. I currently have a car loan with an awful interest rate, but I have never been late. My credit score is lower due also to old debt that’s been settled and student loans. (Both of us are in grad school currently so our student loans are no longer an issue.)
We want to finance a new car and we make approx. $111,000 per year with our combined incomes. Will the income be enough to get a good rate on a car loan or should we just hold off until we can save money to buy something out right?
Auto finance is what I do for a living and income has nothing to do with interest rate.
Auto loans are based on the following factors period;
1. Loan to value.
2. Term of loan.
3. Age of vehicle.
4. Miles on vehicle.
5. Down payment.
6. Time on job.
7. Time at residence.
8. Monthly income before taxes. Only used to see how much payment you qualify for.
9. Credit score/profile.
10. Total debt to income ratio.
With your scores depending on the loan to value ratio your looking at high interest no matter what you buy.
Davina asks…
I have a mortgage with an adjustable rate (fixed two year). In Feburary it adjusts and I wish to refinance to a fixed loan. My middle credit score is 650. I have about $5000 in savings no credit card debit and 1 car loan. All payments have been on time.
It sounds as if you have your financials in order. Any financial institution, or mortgage company will work with the borrower to avoid a default (generally nonpayment) on the loan. Start asking your current company questions and research different companies as soon as possible. The more knowledge you have will help you make the best decision for you. Also it helps if you know exacly what you want to do.
Rachel asks…
Initially I was pre-approved at my bank with a fixed interest rate at 6.24%; for the loan amount of $14,000 just under me without a co-signer. It turn out it cost more for the car than I’ve expected. So the finance officer at the dealer said my bank won’t give me more than what I’ve asked for. I thought that was weird. So I went with their bank with my dad as the co-sign. The dealer did his thing and came back with a interest rate at 10+%! Now just to let you know, my dad has good credit. My dad has never miss any mortgage payment or any of the two car payments he has. And I my self have a credit score of 663 which is good itself. I’ve have been making payments for my previous car for more than three years on time. What should I do?
First of all, they did it because it is in human nature to be greedy. As much as you can deny it, everyone out there is a narcissist. You want a better rate, the people who are financing your car want more money, and inevitably interests will conflict. Your rates went up because you made a mistake, and now you need more money. The bank, which has loads of money, ultimately has the upper ground here. They present a rate to you and you can either choose to accept it, or deal with missing car payments and possibly repossession. Maybe you should have bought a used car for a fraction of the price and just about the same level of quality.
Lisa asks…
Is it wise to decrease your credit limits on credit cards that are seldom/never used? I know not to close the accounts because it will hurt my credit score, but if I just lower my credit limit, as long as I am still under the magic 10-30% usage of my total credit limit, can that actually help? I have heard that having too much credit can be considered a negative. I am hoping to purchase a home within the next 6-8 months and I am trying to do what ever I can to increase my chances of a good mortgage rate. BTW, I have done the free credit reports, and everything is correct. I have paid off most of my credit debt over the last year, and I am currently at about 15% of my total credit limit. I do have too many credit cards (6), but I am afraid to close them outright. Of those six credit accounts, three are completely paid off and never used, the one I regularly use is paid off every two weeks, one should be paid off completely in a month, and the other is getting paid off before I start filling out mortgage applications. I also have student loans, and a car loan that I am currently paying off as well. Sorry if this is too much information, but I want anyone who can give me an answer to have the full picture. Any help is appreciated.