How do creditscore and creditlimit relate to each other when applying for a car loan? - Camaro5 Chevy Camaro Forum / Camaro ZL1, SS and V6 Forums

diddiyo · 02-14-2009, 08:47 PM

Hi!

I have a question since I don't know a whole lot about financing and stuff. Until recently I had a student credit card with a small limit and I only got a regular credit card a few weeks ago. My score is +750, but my limit on the "regular" CC is not (yet) a whole lot higher than on the student credit card. I never really put a lot on it (unless I'm traveling etc).

Whenever you hear people talk about credit etc you only hear "credit score" but never "credit limit". Do the two in any way relate to each when applying for an auto loan? Or is it only the "debt-ratio" that matters?

Thanks in advance

mwoodengr · 02-14-2009, 08:52 PM

When applying for an auto loan, the main thing is credit score. The limits on your credit cards is not going to be an issue at all. If you have a score of 750 or higher, you will not have any issues with getting approval, unless you have NO verifible income.

JMAN311 · 02-14-2009, 09:01 PM

Quote:

Originally Posted by mwoodengr

When applying for an auto loan, the main thing is credit score. The limits on your credit cards is not going to be an issue at all. If you have a score of 750 or higher, you will not have any issues with getting approval, unless you have NO verifible income.

Also most lenders usually want a debt to income of under 50%.

DeathChill · 02-14-2009, 10:01 PM

Quote:

Originally Posted by JMAN311

Also most lenders usually want a debt to income of under 50%.

This is an odd question but what is the debt-to-income ratio mean? Is it what I make in a year/month/minute versus how much I owe?

Banshee · 02-14-2009, 11:28 PM

Your debt to income is the total of your mortgage, installment and other credit obligations (revolving) divided by your gross monthly income.

$5000 gross income, $1500 mortgage, $500 car payment, $250 student loan $250 4 credit cards equals 50% debt to income.

If it were $10k monthly income and your payments are $2500, you have a 25% debt to income ratio.

It DOES NOT include utilities, food, gas, or anything else.

Try this..

http://www.creditsoup.com/resources/...bttoincome.asp

Banshee · 02-14-2009, 11:31 PM

You can get the same rate if your credit score is below excellent tier, say 700 if you put a significant down payment on the car as security interest. Banks like that because it shows they are not upside down with a 10-15k down payment on a 35k car.

THE EVIL TW1N · 02-14-2009, 11:36 PM

Quote:

Originally Posted by mwoodengr

When applying for an auto loan, the main thing is credit score. The limits on your credit cards is not going to be an issue at all. If you have a score of 750 or higher, you will not have any issues with getting approval...

that's not true at all.

There are many factors that are considered when it comes to getting loans for cars. You can have a great credit score but still get denied because of a short or limited credit history. And you can have a pretty bad credit score and still get a loan. Credit history is a big part, and having small credit lines doesn't help too much. And if it's your first car loan, even with a 750+ score may still need a substantial down payment or a co-signer. I've been a part of deals that fall apart for this very reason when I was a sales guy at a dealership.

what bureau did you run your credit through? experian, transunion, or equifax? TransUnion and Equifax both will generally show a much higher score, but Experian is the one usually used for automobile purchases.

dtipper · 02-14-2009, 11:58 PM

Evil twin pretty much hit it on the head. The way the banks are acting you won't know till you get submitted. First time buyer is usually 15k max or less for an amount financed. I had an 800 score get turned down because they are retired and don't make enough to justify their debt to income. The bank doesn't care how much they have in their account. And different banks use different bureaus. Wasn't like this a couple years ago but in time it will change again.

Damien Tipper
916-788-8761
Internet Sales Manager
John L Sullivan Chevrolet
Roseville, California

NUCAR · 02-15-2009, 10:46 AM

[QUOTE=THE EVIL TW1N;291077]that's not true at all.

There are many factors that are considered when it comes to getting loans for cars. You can have a great credit score but still get denied because of a short or limited credit history. And you can have a pretty bad credit score and still get a loan. Credit history is a big part, and having small credit lines doesn't help too much. And if it's your first car loan, even with a 750+ score may still need a substantial down payment or a co-signer. I've been a part of deals that fall apart for this very reason when I was a sales guy at a dealership.

Evil twin pretty much hit it on the head. The way the banks are acting you won't know till you get submitted. First time buyer is usually 15k max or less for an amount financed. I had an 800 score get turned down because they are retired and don't make enough to justify their debt to income. The bank doesn't care how much they have in their account. And different banks use different bureaus. Wasn't like this a couple years ago but in time it will change again.

QUOTE]

The bank approval will be the undoing of many a supposed deal on the preordered cars.

The banking climate is very difficult now and it is impossible to predict how long it will take for the "economic stimulus" to trickle down to consumer lending. Be prepared, talk to your dealer about funding or line up your own and be ready for sudden shuffles of your place in line. You may find your order moving up in priority.

diddiyo · 02-15-2009, 12:23 PM

then I guess that's the real reason they didn't offer me the 0% financing when I was shopping for a challenger.

all this doesn't look too promising for the camaro either i guess... first time buyer, not a long credit history etc. oh well, gotta start thinking of something else to do with my monies then.

Rob@WretchedMS · 02-15-2009, 01:19 PM

One thing to be careful with, When i got the SRT8 for the wife, the dealership shopped 20-25 different lenders looking for the best rate. While this was nice of them to save me 1/4%, all of the additional checks in to my credit history effected my score.

kstmbkes · 02-15-2009, 01:33 PM

my credit is in the rebuiling stage, I had a ford truck repo'd in 2007 dealer told me not to worry they will work it out with the financing with the time comes. I have already figuared out what I need to to and have done the necesarry steps. When it came to my monthly budget I have 1500 a month after taxes, rent, fuel, food, entertainment etc. I already have 3000 set aside for my down payment of course the longer my car takes to get here the larger my down payment is going to be. I ordered my car on Nov. 1st. I maybe lucky to see it in june but i doubt it. Dont matter I have been waiting for this car to go into production for years whats another couple of months.

Mr_Draco · 02-15-2009, 04:36 PM

Quote:

Originally Posted by diddiyo

then I guess that's the real reason they didn't offer me the 0% financing when I was shopping for a challenger.

They also took the Challenger off the list early too. A day or too after you made your post about that, I seen a commerical and heard a radio ad and both of them no longer included the Challenger in the list of available vehicles.

Mr_Draco · 02-15-2009, 04:48 PM

Quote:

Originally Posted by THE EVIL TW1N

that's not true at all.

There are many factors that are considered when it comes to getting loans for cars. You can have a great credit score but still get denied because of a short or limited credit history. And you can have a pretty bad credit score and still get a loan. Credit history is a big part, and having small credit lines doesn't help too much. And if it's your first car loan, even with a 750+ score may still need a substantial down payment or a co-signer. I've been a part of deals that fall apart for this very reason when I was a sales guy at a dealership.

I went to see my loan agent at the bank friday about trying to get a credit card and a small loan to get a credit score and credit history started. When he asked me for what reason was I wanting the loan and credit card, I told him about wanting to buy the Camaro next summer. He told me this exact same thing. That unless I get a co-signer and pay atleast 50% myself, in the current economy, that I wouldn't qualify for such a big loan with such a limited credit history. If I couldn't get a co-signer, I would need to pay atleast 75% of it myself.

02-14-2009, 08:47 PM	#1
diddiyo Drives: . Join Date: Jun 2008 Location: . Posts: 3,048	How do creditscore and creditlimit relate to each other when applying for a car loan? Hi! I have a question since I don't know a whole lot about financing and stuff. Until recently I had a student credit card with a small limit and I only got a regular credit card a few weeks ago. My score is +750, but my limit on the "regular" CC is not (yet) a whole lot higher than on the student credit card. I never really put a lot on it (unless I'm traveling etc). Whenever you hear people talk about credit etc you only hear "credit score" but never "credit limit". Do the two in any way relate to each when applying for an auto loan? Or is it only the "debt-ratio" that matters? Thanks in advance

02-14-2009, 08:52 PM	#2
mwoodengr Clueless Member Drives: 2005 PT Cruiser Convertible Join Date: Jan 2009 Location: New Orleans, LA Posts: 136 View My Garage	When applying for an auto loan, the main thing is credit score. The limits on your credit cards is not going to be an issue at all. If you have a score of 750 or higher, you will not have any issues with getting approval, unless you have NO verifible income. __________________ Driving my Rally Yellow 2LT Original order - Cancelled 1100 = 11/15/2009 New Order 1100 = Preliminary Order: 1/26/2009 2000 = Accepted By GM: 5/27/2009 3000 = Accepted By Production Control: 6/16/2009 3800 = Produced: ? 4150 = Invoiced: ? 4200 = Shipped: 7/3/2009 5000 = Delivered To Dealer: 7/14/2009 6000 = 7/18/2009

02-14-2009, 11:28 PM	#5
Banshee Institutionally Insane Drives: 2013 IOM 2SS/RS 1LE Join Date: Feb 2009 Location: Detroit MI Posts: 2,115 View My Garage	Your debt to income is the total of your mortgage, installment and other credit obligations (revolving) divided by your gross monthly income. $5000 gross income, $1500 mortgage, $500 car payment, $250 student loan $250 4 credit cards equals 50% debt to income. If it were $10k monthly income and your payments are $2500, you have a 25% debt to income ratio. It DOES NOT include utilities, food, gas, or anything else. Try this.. http://www.creditsoup.com/resources/...bttoincome.asp __________________ It's got a cop motor, a 440 cubic inch plant, it's got cop tires, cop suspension, cop shocks. It's a model made before catalytic converters so it'll run good on regular gas. What do you say, is it the new Bluesmobile or what?

02-14-2009, 11:31 PM	#6
Banshee Institutionally Insane Drives: 2013 IOM 2SS/RS 1LE Join Date: Feb 2009 Location: Detroit MI Posts: 2,115 View My Garage	You can get the same rate if your credit score is below excellent tier, say 700 if you put a significant down payment on the car as security interest. Banks like that because it shows they are not upside down with a 10-15k down payment on a 35k car. __________________ It's got a cop motor, a 440 cubic inch plant, it's got cop tires, cop suspension, cop shocks. It's a model made before catalytic converters so it'll run good on regular gas. What do you say, is it the new Bluesmobile or what?

02-14-2009, 11:58 PM	#8
dtipper Drives: 2007 Tahoe Join Date: Feb 2009 Location: Roseville Posts: 59	Evil twin pretty much hit it on the head. The way the banks are acting you won't know till you get submitted. First time buyer is usually 15k max or less for an amount financed. I had an 800 score get turned down because they are retired and don't make enough to justify their debt to income. The bank doesn't care how much they have in their account. And different banks use different bureaus. Wasn't like this a couple years ago but in time it will change again. Damien Tipper 916-788-8761 Internet Sales Manager John L Sullivan Chevrolet Roseville, California

02-15-2009, 10:46 AM	#9
NUCAR Drives: 68 big block Join Date: Oct 2008 Location: tossed off see ya Posts: 399	[QUOTE=THE EVIL TW1N;291077]that's not true at all. There are many factors that are considered when it comes to getting loans for cars. You can have a great credit score but still get denied because of a short or limited credit history. And you can have a pretty bad credit score and still get a loan. Credit history is a big part, and having small credit lines doesn't help too much. And if it's your first car loan, even with a 750+ score may still need a substantial down payment or a co-signer. I've been a part of deals that fall apart for this very reason when I was a sales guy at a dealership. Evil twin pretty much hit it on the head. The way the banks are acting you won't know till you get submitted. First time buyer is usually 15k max or less for an amount financed. I had an 800 score get turned down because they are retired and don't make enough to justify their debt to income. The bank doesn't care how much they have in their account. And different banks use different bureaus. Wasn't like this a couple years ago but in time it will change again. QUOTE] The bank approval will be the undoing of many a supposed deal on the preordered cars. The banking climate is very difficult now and it is impossible to predict how long it will take for the "economic stimulus" to trickle down to consumer lending. Be prepared, talk to your dealer about funding or line up your own and be ready for sudden shuffles of your place in line. You may find your order moving up in priority.

02-15-2009, 12:23 PM	#10
diddiyo Drives: . Join Date: Jun 2008 Location: . Posts: 3,048	then I guess that's the real reason they didn't offer me the 0% financing when I was shopping for a challenger. all this doesn't look too promising for the camaro either i guess... first time buyer, not a long credit history etc. oh well, gotta start thinking of something else to do with my monies then.

02-15-2009, 01:19 PM	#11
Rob@WretchedMS Drives: His Wife Crazy Join Date: Jan 2008 Location: Silas Deane Auto,CT Name: Rob Anderson Posts: 1,789	One thing to be careful with, When i got the SRT8 for the wife, the dealership shopped 20-25 different lenders looking for the best rate. While this was nice of them to save me 1/4%, all of the additional checks in to my credit history effected my score.

02-15-2009, 01:33 PM	#12
kstmbkes Drives: 2010 Camaro, 2ss Rally yellow Join Date: Dec 2008 Location: Evansville, IN Posts: 69 View My Garage	my credit is in the rebuiling stage, I had a ford truck repo'd in 2007 dealer told me not to worry they will work it out with the financing with the time comes. I have already figuared out what I need to to and have done the necesarry steps. When it came to my monthly budget I have 1500 a month after taxes, rent, fuel, food, entertainment etc. I already have 3000 set aside for my down payment of course the longer my car takes to get here the larger my down payment is going to be. I ordered my car on Nov. 1st. I maybe lucky to see it in june but i doubt it. Dont matter I have been waiting for this car to go into production for years whats another couple of months.