Overhaulin'

680-687 credit score, was denied 8k car loan from capital one. Make about 60-70k/yr. why? what next?

I work 7a-730p, so I have to be up by 545am to catch the bus and I usually dont get home until 830-9p. I dont live far from work, but I live in LA so there is always much traffic. My initial goal was to pay off my CC balance of 5k, in next 5 months have fico score go up and then finance car or save 5k pay car cash and pay CC off a little later, but taking the bus is getting harder and harder. So I went ahead and applied yesterday and was denied. I was shocked as my fico score is considered good and I have no delinquencies. My only problem is the CC balance of 5k out of 8500 limit, my score used to be 720! Anyway, what should I do? Comments welcome.

Public Comments

1. the market is bad right now, so the loan can be tough to obtain..try alternate source.like a car dealership who will accept anybody
2. The credit world is getting very tight right now. With you score it would be likely that a bank would lend you for the funds (if you income supports the payments needed) Go to a bank and ask the question ~ also, get enough on the loan (if at all possible) to pay the balance on the credit card as well and don't use your credit card like that in the future. Only pay the balance each and every month in FULL.
3. I'm going through that same crap right now. Mine is like a 675 so not enough diff to matter. I made 75 this year too so we are similar in that way too. I have a friend that is in the credit industry and he said that my balances were too high compared to my limit. They want your balance below 30 percent, so you need it below 3500 or so. Good luck but the economy is in the crapper even for people like us.
4. Capital one is gay, i had them their customer service blows and its really hard to get approved thrue them for a big loans. I got a USAA that approved me for my car loan in 15 minutes, with no problem. Consider other credit sources
5. LA buses are a nightmare. So are the credit markets. And CapOne is getting a particularly bad rep. CapOne = Capone, as in Al, as in hold a gun to your head. With that kind of income, you should not be carrying CC balances. Get that $5K paid off fast. It shouldn't have hung around this long. Next, you need at least 20% down on the car, preferably 30%. And dealers are so overstocked that many are doing very, very low interest rate deals, especially on their leftover 2008's. At your income level, you should be saving at least 7K/yr. That's $600/mo or $150/wk. Put it away each and every paycheck before you see a cent for rent, etc. In fact, if you are single, you should put away at least $250/week. If married (double income, no kids), your taxes are lower than a single, so save at least $300/week. A single in LA can live very, very large on $750/wk with no car pmt.
6. Pay off the credit cards. About a third of your score is based on the ratio of credit card debt to limit. Carrying balances of more than 30% hurts your score; over 50% kills your score. Pay off the credit cards completely. Not only will your score increase, but all that outstanding debt is undoubtedly why you were turned down for the car loan.
7. Companies are tightening up when it comes to lending money. It is difficult for those even with great credit to get loans, especially for cars. My advice would be to actually obtain a copy of your credit report and review it if you haven't already done so. Then, instead of going through Capital One, I would go to your bank where you already have a relationship or directly to the dealership with a copy of your credit report in hand. Also, it is tougher to get a loan for a used car than for a new one (as odd as that seems) so maybe look at exploring your options for leasing or actually buying new. Also, pay off that CC as soon as you can...that'll help boost your credit score. Good luck. Your score isn't bad...you should be able to secure the financing somewhere.
8. try anothr company. you can now get GMAC financing with a 625 score. so basically for five days a week you do nothing but get up and go to work and then go back home on the bus. wow. your busy.