Credit Union Said No, Now What?

Question

I tried to get financing through a credit union for a car that's only 18K--they said no. I have a steady job with a steady income, but the lady said my debt to income ratio is too large. Who in the world is going to finance me now if a credit union won't do it? Anyone have advice? Yes I know, one answer would be to wait until my credit improves, but with the amount I'm making at my job that won't be for another 5 years. Any ideas? Please help.

Thanks.

Answer 1

Credit unions are not always the best when it came to Auto finance. The do have stricter policies that can not be broken not even bent. Auto dealers have many different lending intuitions that can help you that have higher DTI (debt to income) PTI(payment to income). Depending on credit, stated income can be used. One thing about dealer financing they are able to mark up the rate to make a profit, which is why they are in business. Much more to say but not enough time.

Answer 2

First thing I would do is take a look at your credit report.

If you are denied credit, insurance or a job because of something in your credit report, that organization has to tell you which credit bureau provided the information. You are then entitled to a free credit report from that bureau within 60 days of being denied credit. Get your report and see what's on it, who knows, there could be errors (old debt that's been paid off but not showing as such, etc.).

Your only other options are to either reduce your debt or increase your income. I vote for reducing your debt. Drive you're existing car a couple more years. Every month you keep your old paid-off car is like you're getting paid an extra couple hundred dollars a month.

Answer 3

I would definitely look at getting a less expensive car. My 2003 PT Cruiser cost only $8500 (I bought in 2/2006). It has a warranty and is a great car.

I really can not see a situation where anyone needs an $18K car. Plenty of good cars cost far less than that.

Also, check around with other credit unions and look at reducing your debt in others ways.

Answer 4

First things first, get a copy of your credit report and make sure it's accurate. You don't want to be penalized for something that isn't your fault, and you can contest any inaccuracies.

If your debt:income ratio is really too large, you may have to look to other sources for the loan. Check out http://www.mortgageous.com/noriskcredit - they finance auto purchases regardless of your credit history.

Another idea would be to look into having someone co-sign your auto loan. If you have a family member with good credit who is willing to help you out, that might be your best option.

Answer 5

They may loan you the money for a cheaper car.

You dont necessarily have to go through a bank, try looking at a dealership and getting financing through them. they tend to have more relaxed credit guidelines.

Good luck!