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Posted in Auto Loans
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Question By
milalealu1

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can i get an auto loan with high credit utilization but otherwise decent credit?
We're looking into trading in one of our current cars for a new one, and the new monthly payment will be about $100 more than the current one. Current DTI is 31% and would increase to about 32% with the new car payment. Spouse and I make combined $150k, although we're still paying back about $30k in consumer debt we accrued when we were living on 1 income a few years ago. Other than that, we have a mortgage, one other auto loan, and a small student loan (<$10k). Never had a late payment on any account, no collections, or any negative credit activity other than high utilization (currently about 75% but decreasing steadily) and we're young so we only have about 5 years of credit history. I'm just so worried we're not going to get a loan, even though our scores are ~680 and rising. We're looking for a 20k loan, and with the trade in as a decent downpayment we won't be underwater on the loan at all. But I'm still paranoid that we will get denied or get a really bad rate. I think I'm more worried because I was denied for a credit card last year, so I don't want to go through the embarrassment. But I'm thinking an auto loan is different/easier since it is secured. Am I stressing over nothing?

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You might be able to get one but you'd be much better off (better odds of approval, better rates, etc) with lower revolving utilization.  The installments (mortgage, auto, student) are weighted differently.  They'll certainly consider your DTI as well but getting revolving utilization down will have a bigger impact.

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