Weird Loan approval help needed

[Blksn955.o]

my guess is the hard credit pull on your bronco loan.

Banks at least for mortgage will do a tri pull or tri pull merge if two or more borrowers are on the app. Along with using Front end along with back end DTI to make sure the payment is in the target for that loan type.

Revolving credit will mostly use the back end DTI and credit score. Like said above and by others the hard pull will be a red flag and they are assuming some action in that amount shortly.

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[Austin26]

I'm not sure why you applied for a loan for the Bronco so soon/early. Or even how you got a loan. Or did you just get pre-approval? Either way, you don't want to apply for a loan before you'll actually need it, as that creates a hard pull (minor ding on your credit score). But worse, if your financial institution commits to the funding, that will show on your credit, even if they don't yet disburse the funds. Further, they will certainly do another credit pull when you actually expect to get the funds because they will want to ensure your credit situation hasn't changed.

Also, there's nothing inaccurate about your credit score from Credit Karma (or other sites) per se. You just have to keep in mind that there's no single scoring system. In the fine print, they tell you which score they are using. There are different models used by home lenders vs. auto loans, for example. Also, there are three credit bureaus and the free scores only include a score from one of them (again, the fine print says which one). It's highly likely that some of your credit history is reported to one or two but not all three bureaus. This, among other things, means there is a natural variation in your score from different sites, bureaus and dates the information was pulled. You could have a late payment or collection reported on one but not another, for example.

But the bottom line is that if you applied for the Bronco in your name, NFCU may have decided that the couch loan exceeds the debt-to-income ratio they like, whereas your wife does not have that loan counted against her.

Finally, 2.19% is pretty inexpensive financing. You mentioned paying double payments to pay it off earlier. I don't know your financial situation, but consider how that money could be otherwise used. For example, applied to your home loan, which is at a higher rate. Or a credit card or other loan at a higher rate. Or invested (after considering the risk) to get an even better rate of return. Finally, if you don't have a nice cash nest egg (at least three months), you could build that at relatively low (2.19%) cost.

Apologies, the couch loan was through Wells Fargo which happened to even be my own bank! The furniture store just happened to use Wells Fargo, I didn't go to WF myself asking.

I approached them for a pre-approval but was explicit in not wanting to actually purchase anytime soon. They said just shred the blank check and nothing bad will happen. I wasn't worried about one hard pull a year before I need to finance though.

I appreciate the advice in the last paragraph. Luckily I can say that most of those things are taken care of except the home loan as we are renting our house. We could just invest or save for a down payment on a house which we plan to buy in the next two years. (Though I qualify for a VA loan and don't necessarily need a down payment I'm told, I also look forward to paying it off as quickly as possible)

It seems like your credit score is really low for not having anything listed on your credit scores. I would check all three and make sure a company hasn't filed anything against you. With your description of very little debt and on time payments I would say you should be 775+ if not in the 800s.

I will do so. I've been fighting with my medical provider and insurance the last few months in some claims incorrectly denied. Nothing in the mail about sent to collections but now you have me thinking! Thank you!

 

[lobbs611]

As has been mentioned a few times getting a hard pull for a large purchase and then getting another in short order can set off red flags for creditors. Not sure why you couldn't have just gotten a soft pull or pre-approval on the loan for the Bronco to get an idea where your rate is going to land. They don't ding your credit score.

 

[mtap]

Wait 7 days, check your mail. You should receive a letter from the bank that declined you with an official answer to why. If not you can request for one. But like everyone says, too early to be shopping for car loans. At least wait for a VIN or an ETA on delivery. Approvals on loan offers have an expiration date...if it expires before your Bronco delivery, you will have to go through the whole process again with the possibility of a higher rate then since you already got dinged for a hard check and then a second hard check later.

 

[Ryuk]

I understand how it works. Its just stupid. What I posted is one of the ways to increase your score with literally no change in income or debt. Just Limits.

 

[Bronco4lyfe85]

Credit is a sham. They’ll tell you that opening credit cards is bad for you and having too much credit is bad for you or your score is low because you opened a new account. Then Experian/transunion etc will tell you the way to “fix” your credit is to apply for more credit.

okay.

 

[Austin26]

By the way everyone, I worked at Nissan for years and have a clear understanding of hard credit pulls and their affect on credit. A pull or two within a two week to four week period doesn't change much at all. I am claiming this because I ask a lot of questions and learned from our managers that really know how to work for the best approval for the customer (yes, in an effort to sell cars but regardless to the same end).

We had some customers that refused to listen and pulled everywhere they shopped for a car and we went from barely being able to approve them to not being able to approve them because they pulled a dozen times or so.

I mention this because I have experience in this area and having a pull or two isn't the end of the world. Really. Still, don't do it unless you 1. Are ready to buy or 2. Want to concretely know your options.

Wait 7 days, check your mail. You should receive a letter from the bank that declined you with an official answer to why. If not you can request for one. But like everyone says, too early to be shopping for car loans. At least wait for a VIN or an ETA on delivery. Approvals on loan offers have an expiration date...if it expires before your Bronco delivery, you will have to go through the whole process again with the possibility of a higher rate then since you already got dinged for a hard check and then a second hard check later.

Yes, I did receive the denial letter from the bank but it didn't say why / didn't help me understand.

 

[Bronco4lyfe85]

I did a soft pull Capital one pull Monday morning out of curiosity. They approved me for 60K without my wife at 3.25-4% for 60-72 months. Not bad. Credit unions should be lower.

 

[timhood]

Credit is a sham. They’ll tell you that opening credit cards is bad for you and having too much credit is bad for you or your score is low because you opened a new account. Then Experian/transunion etc will tell you the way to “fix” your credit is to apply for more credit.

okay.

There's a long and a short game to be played here. Factors: more than two hard inquiries in a two-year period (that's how long they stay on your report) will reduce your score. But not by a ton, so I wouldn't sweat a third or fourth if new credit is needed. Also, credit utilized matters. So, if you put enough on credit cards (and pay it off every month), you need much more available credit to keep the utilization low. So, more open credit may be needed. Also, average account age matters, so adding a new account reduces that average and temporarily lowers your score while in the long term helping to build your score.

So, there's a balance of getting credit early (have your parents start by adding you as an authorized card holder before you are even 18 if they manage their credit wisely and always pay on time), or at least, open your own credit at age 18. Get a Visa/MC/Discover that you would plan to keep open potentially forever. (So, nothing with an annual fee, of course). Even if you don't plan on using it as your primary card because a better one comes along, keep it open by at least having some activity with it.

Add additional credit and credit types (such as an auto loan), but not too much at once. Building a history of on-time payments makes a huge difference. NEVER BE LATE! We're in the age where you can be auto-reminded, auto-pay and post same-day payments. Being late even once is stupid. Making a minimum payment on-time is far better than being late and making a full payment.

Don't allow yourself to get sent to collections.

No late payments, plus no collections, plus a decent payment history = 800+ credit score.

P.S. Don't worry about going for a "perfect score". Above 740 I (in the 850=perfect model) gets you the best rates regardless of whether you are 760 or 850. But always strive for the best score, because you can expect a significant swing in your score based on seemingly normal monthly activities. My score has a 30-point swing in a given year, with no adverse events.

 

[timhood]

Agreed, credit score manipulation almost feels like a game. Going from traveling 3 weeks a month to working from home for a year turned into a catapult for my credit score. Nothing changed in my spending habits for personal use, but $8-10k per month in reoccurring credit use from travel hurt my score. Total utilization was never over 20%, but as soon as I stopped spending for work my score went from the mid 700s to almost 800.

If you ever anticipate needing a loan, the easy trick is to make a payment to your credit cards just before the statement closing date. The cards report your statement balance, so you can still charge your work travel expenses (or home improvement or whatever expenses). Just pay enough so that your reported balance stays low and therefore your utilization is low. This is especially helpful for a home loan. You just need to plan a little in advance because and pay down or payoff the balance a month in advance of the loan so that when your credit history is pulled, the low/zero balance is shown.

 

[BlueBronco]

P.S. Don't worry about going for a "perfect score". Above 740 I (in the 850=perfect model) gets you the best rates regardless of whether you are 760 or 850. But always strive for the best score, because you can expect a significant swing in your score based on seemingly normal monthly activities. My score has a 30-point swing in a given year, with no adverse events.

My credit swings at least +/-50 points at the end of each year I can practically set my watch by it. End of the year donation via credit card in December, credit gets dinged 30 points in January. Paid off when next statement is received, credit is raised 25 points in February. I just remember not to make any major purchases via credit in the first 2 months of the new year (and since I jinxed myself, that is now when my Bronco will show up).

 

[rugbysecondrow]

It is hard to give specific advice, but I would order a copy of your credit report and be aware of what it says. Are there a bunch of open retail cardwith available credit (lowes, home depot, old navy, kohls etc). Are your utility bills paid on time, mortgage, literally anything that would be a ding or a mark. Fix these and make sure the report is accurate. This is your financial reputation and fingerprint.

I am also super careful about credit inquiries, so much so that I have a block on my account so new inquiries can't even be made unless I unlock it. Too much room for fraud.

Lastly, don't request credit approval unless you absolutely need to or are ready to move forward. About 15 years ago, I thought I was being a good consumer by shopping around for the best mortgage rates. Little did I know that my shopping around negatively impacted my score. Luckily a lender recognized and ignore the ring, but it was a Wake up call...don't f&$@ around with your credit. Be purposeful.

caveat emptor

 

[Aman]

Oh you know it is going to happen now. Here comes an exploding water heater and roof leak.

Ahhhhhh, the joys of home ownership. I've been getting quotes from roofers for the past week or so.

 

[BennyBronco69]

Within the last couple months I applied for an auto loan in the amount that I'll need for the Bronco with Navy Federal Credit Union. I was approved for their lowest available rate of 2.19% @ 60 months or 2.29% @ 72 for 35k finances for a new vehicle.

My wife decided we needed a new couch last month and I applied for their no interest loan just to have some open lines of credit and was denied. My wife applied and was approved.

What on Earth do you think is happening? How can I be denied on a couch loan and approved for a vehicle loan of $35,000?

My wife and I's credit is both in the 675-725 range. I know not to trust Credit Karma though so I'm underestimating. Both of our auto payment history has no missed payments or possibly one missed payment last year for me though I've applied to have the error corrected (boring story but I don't believe I'm at fault).

I currently have one open but paid off credit card. We charge something to it every once and a while and pay it off immediately. The only other debt I have is small and about to be paid off (federal student loan).

Current thought process for the Bronco is to put $10k down and finance about 32-35k at 72 months and make roughly double payments as that rate is great for 72 months. No trade.

Does your loan not have a time limit? As in... its good for X days.

Why get a loan now when your purchase is so fast away?

 

[Ryuk]

I hear ya,
Every time I buy something nice, something expensive breaks.

Murphy is such an asshat.

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