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New auto loan w/ 659 credit score...foreclosure looming.
Hello everyone, I was hoping I could get some advice. Two years ago I had a 750 score. I've paid off two auto loans, a few sig loans and been on time for over a decade on my numerous credit cards, although I've maxed them out a few times but always paid them off in time.
My issue is with my mortgage. Being active duty military, I vacated my home and rented it out for nearly three years, but eventually decided to default as I was under water around $50K on the loan. So I haven't made a payment in over 2 years, the house is in pre-foreclosure. Credit gradually dropped to 602, then back up to 659. I'm expecting another hit once the foreclosure hits. I have a high debt-to- limit ratio now, but will have all three remaining cards paid off in 6 months as well as the remaining $3K of my current auto loan.
I was recently rejected for a debt consolidation loan for my cards and don't want to add another inquiry toy credit. What are my odds of acquiring a decent auto loan in the range of $20K? What interest rates can I expect? Thanks in advance for your advice!

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I really doubt you can at this moment, especially not a $20k car. They are going to see 24 straight months of late payments on your mortgage and know foreclosure is looming. At the moment you are very high risk. I would do what you can to not hold up the foreclosure and let it go through to get it over and done with (not saying you are holding it up, just saying if anything is in your control). Plan to build your credit back up for the next year after that. Get your cards paid off and then use them once a month after that and pay them off in full each month. Keep paying on your car payment, I'm not sure there is even a need to pay it off early, the on-time payments might help you more than paying it off in full in your situation (maybe keep paying on it until just prior to car loan shopping, then pay it off). Go join a credit union right now if you don't already have one, and use it as a savings account for the next year. With a credit union you have the chance to sit down and speak with the person approving the loan and you have a much higher chance of them taking a chance on you; not to mention much lower interst rates (the worst rate at my cu is 11%, with you current score a private lender would be like 18%). After a year has passed after your foreclosure is resolved, then I would revisit your credit score at that time, hopefully with a low utilization rate, a year of on-time payments on all of your accounts & late payments all 1 year+ old, a lower debt-to-income ratio you should be in much better shape than you are now. You will still have the hit from your foreclosure, but by waiting a year you will be showing yourself in a good place at that current moment. Unless you absolutely need the car, then you could try one of the car lots that cater to people with credit issues, you will end up paying a ridiculous interest rate, but it will get you in a car.

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I would try to get a cheaper car,as I need a car after BK discharge in april. I was trying to stay under 10 thousand ,because I quite frankly do want more debt than 10 thou......which I need to consider the high interest as well.

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Deed in Lieu

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Talk to your lender about a Deed in Lieu of foreclosure. It saves them lots of money and legal hassling and you can be out from under the mortgage/foreclosure issue faster. Smaller ding on your credit than a foreclosure as well. Once you agree, leave the house in the best possible shape for resale.

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