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Posted in Auto Loans
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Question By
JT2489

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6 Recent Inquiries...Oops?
Well I foolishly listened to someone who told me that I should open up a few (more) credit accounts to improve my credit. I applied for a handful of credit cards (4) and got approved for all 4. My thinking was that I'd just go ahead and do the damage all at once rather than spread it out. I I know, I realize now I made a mistake. Please don't chastise me, I know it was stupid.

At any rate, my current score is 690 (real score) with 13 inquiries within the last 2 years. 6 in the last month. The older ones are from when I tried for a car loan but did not get it on my own last year. Two of the recent ones are from me not knowing that requesting credit limit increase generates a hard inquiry.

Problem is now I am looking at/needing a new car. I also have verifiable but highly erratic income from my part-time job. It's not much but it's there. I've already figured out my financing and I know what I can afford a month. I should mention my credit utilization is only about 12% (thanks to the credit cards I just got). I've -never- missed a payment. I've always paid everything off every month. I've been careful not to get anywhere close to the credit limits on any account.

I have a cosigner willing to help me out and his credit profile is great. 760 score, low debt, high (verifiable) income. About 20% credit utilization for him. He currently has a car loan he's about half-done with at only 13k for the original amount.

So, I'm looking at a car that's used. It's a year old, from a dealer, certified pre-owned, <20k miles on it. Loan amount would likely be about 13-14k (after a 2k down payment).

Should I let the dealer find me a loan? I know everyone says "don't let the dealer do it" and "don't say you want to negotiate monthly payment" but at this juncture I'll take what I can get. I don't mind paying a little more over time if it means affording the monthly payments or not. But, I'm always open to suggestions.

Should I even bother with this at all or is it a fallacy to believe I'll even be approved period?

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Look to your own sources for a loan first. Know the rate available to you through your own sources, here, local banks, credit unions, etc. Tell the salesman that you have your own financing but are willing to look at his if they can beat your rate.

You might have some explaining to do. Although inquiries do lower the score the lenders will accept explainations for many items. You probably have a good chance at a loan on your own.

Reply by
JT2489

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Thanks for the info!

I ended up getting a very reasonable loan. Not only did they give us the 72 month loan we wanted, they also gave it to us at only 4.99% which I feel is VERY reasonable considering my crummy credit. On top of that there was no money down required AND no proof of income either.

I feel like we might could have negotiated the APR down a little but honestly, it wasn't really even worth it at that point. The cost of the car was so low that even with the cost of a 72 month loan, when it's all said and done, I'll still be paying equal or even slightly LESS than the KBB retail value of the car.

Thanks again guys!

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