I know that some auto loan places use a separate fico auto score, specifically geared toward auto loans. You could have good normal fico, but since you don't have a long history of auto payments your fico auto score might just be average. I found this out when the Jag guy told me I had the highest Fico Auto score he's ever seen :-p

 

I bet some of you are onto something with the lack of credit idea. Though my credit history is quite good, the only installment loan I've ever had is the lease on my current car, which has only been 3 1/2 years or so. I didn't have a problem when I applied for a mortgage (for a house I decided not to buy) last year, so I figured it would be the same, but perhaps since it's a car it's different.

Who would have thought paying cash for all my past cars would come back to haunt me? I'm going to give PenFed a call tomorrow and see if I can convince someone I'm a good risk. If not, then I'll either talk to USAA (have their insurance) or see what the dealer can do for me.

Worst case I suppose I could pay cash for it, but the idea of doing that when interest rates are so low makes me sad. Plus that would put me in the same position in a few years.

 

Yeah PenFed uses FICO NG2 scores for credit approval. It is scored from 150 to a max of 950 vs the more typical 800. If you have an account with them you can see this score for free on their website. Based on some other forums it looks like it takes a score of 800+ and clean credit to get instant approval. Any blemish requires a person to review the file.

 

Lending institutions like to see people who are carrying a reasonable amount of debt (keeping a low debt to income ratio) rather than paying everything off immediately. Most lenders make their money off interest, so if you pay your credit cards off at the end of the month the lender makes little if any money, other than perhaps an annual renewal fee.

That shouldn't factor into credit worthiness, but I have seen that to be the case in my own investigations. I don't think it directly impacts a FICO score, but it does impact the lenders perspective of your value as a borrower/consumer.

Having a mortgage is probably the single best way to improve/sustain a strong FICO score and consumer credit rating IMO.

I hadn't heard of this FICO NG2 / FICO auto score thing, so that is something to investigate as well. I haven't had any issues personally as I've generally leased my vehicles, so it hasn't come up.

 

I am in the mortgage industry and could probably answer any questions about credit scores that you guys have. Some real quick points, the main factors for a good credit score are:
-payment history
-debt/balance ratio on revolving debt (credit cards)
-length of established credit history

for auto lending, some lenders do look specifically at an auto payment history as part of their underwriting decision. lobsterclaws - what you got from penfed is not uncommon if you have never had a car payment before or only a small one. I had the same issue when I financed my first "expensive" car. Even with a high 700 credit score, I had never previously had a car loan. I had to show the lender proof of income and assets.

to touch on a few points people made above ... there are 3 main credit bureaus, equifax, experian, and transunion - they each have 6-7+ different scoring models that they sell to various lending institutions and "credit reporting" sites. this is why you can see a huge difference in your score from one place to another - even with the same bureau.

 

Thanks for the tip. I've sent PenFed proof of income and assets and am now just waiting to hear back. I imagine the dealership's financing would approve me, but I'm really attracted to PenFed's offerings, so hopefully I can work it out with them.

 

Wow PenFed is thorough! I provided proof of my stock holdings and now they are requesting my past two years of W2!

This is more than I had to provide for a mortgage application!

 

That's because a home doesn't depreciate anywhere as quickly as a car.

 

I see lease specials on the Jaguar website but nothing for the MT :-(

 

So, after a week of PenFed asking for more and more documentation, my loan is finally approved! Now... time to pick out the car! None of my local dealers have the color/option combo I want, so time to put in some legwork.

 

Congrats on the loan. I figured if you could handle the loan they would give it to you even though you don't fit the typical borrower's profile.

 

Thanks yeah, I didn't think it would be a problem but it turned into quite the hassle.

Now for the next step.. finding the car and getting your collective opinions on deals!

 

Congrats and good luck on the search. Lots of options out there.

As for PenFed, if you ever want to use them again it should be instant approval.

 

What is the "end in mind" for those of you who have done these balloon payment loans? In other words, do you go into it knowing that you'll sell the car before the balloon hits, or are you planning to re-finance at the end? Just curious.

 

For me, I'll almost certainly sell the car before the balloon hits. I'm likely to want a different shiny new toy in a few years.

 

me too but I live in a cold weather climate, and I'm not convinced I'd be able to unload the thing! Leases for me, I think.

 

If I still love the car I'll refinance as a regular used car loan. If not, I'll trade it/sell it and get something else.

 

I'm not sure yet. At this point I have no plans either way. I suspect I'll still enjoy driving and looking at my FTR, so it will depend on how reliable the car is over the next 30 months, and what alternatives are out there and the end of the term. Chances are I'll likely trade this one in towards the next, since I rarely keep a vehicle more than 3-4 years these days. I may need to go back to a 911 since with the kid on the way, the lack of a back seat on both vehicles may eventually become a problem.

Something to keep in mind though, one advantage with the purchase vs lease is that if you do a trade in, for those states that have sales tax, you can often get a tax credit on the value of the trade in. So if the new car is $100K and the trade in is $60K, you only take to pay tax on the difference of $40K. If you sell privately you don't get that break. But then again you may be able to sell it privately with enough profit to make up the difference in extra sales tax on the new car.