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Posted in Auto Loans
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dtroland

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Is a 628 score with a $5000 down payment enough for a lease on a 40k car?
I have been planning on leasing a new car. It's a 40K car. I was surprised to find out my credit score has dropped from 700 down to 628. (Equifax and Transunion score) My payment history is 100%, but I have a credit card with $9000 on an $11000 limit, so apparently that is making the score drop. Other than my current car loan, I don't have any other debt. I have $5000 to put down as a down payment, I make 75K a year, and have been at my job for over 5 years. As of a couple months ago, I have very few bills each month. Including the car loan, they add up to about $1300 out of the $6000 I make each month. Those are the positive points. The negative point is that I'm upside down in my trade, although I'm not sure exactly how much yet. Until I just checked my credit score, I didn't think there would be an issue, but now I'm worried. I didn't realize that credit card balance would lower my score so much. I'm supposed to drive 5 hours to the dealership tomorrow to do the deal, but now I'm wondering if I'll just be wasting my time. Do I have a chance of getting this lease?

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I've recently discovered that credit score has much less impact on the amount a bank will loan you than you would think.  Many banks impose limits based on income.  My local credit union for instance wil only loan an amount equal to 50% of annual income for an auto loan.  There are also other limits to consider of course, such as you being upside down on your current car.   Credit score will impact a lenders willingness to expend a loan at all if you are upside down.  Many leases also require a certain amount due at signing.  Any negative equity from your car will likely count against your cash down payment.

Ultimately your income is fine for the car your shopping for and your score is likely adequate.  As long as you are not that underwater on your trade you should be fine.  Good luck!

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