Credit churning before car loan

Discussion in 'Newbies' started by Jeffrey, Dec 19, 2012.  |  Print Topic

  1. Jeffrey

    Jeffrey Silver Member

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    I've been acquiring cards for just over a year now, with the most recent churn being about five months ago. I haven't gotten a decline yet, just reconsiderations. However, I'm probably in the market for a car loan soon... My score is still excellent, of course, above 750, but I want to know two things and I thought this would be a good place to ask. First, should I expect significant pushback from the auto loan given my new accounts in the last year? Second, how should I go about shopping around for credit, either through third party banks/credit unions or the manufacturer's lender bank? I don't want a slew of new Hard pulls. Thanks!
     
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  2. gleff
    Original Member

    gleff Co-founder

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    At 750 I've never worried about things like car loans.

    I also don't think you need to get some sort of pre-approval, just ask you're bank what they're doing in terms of car loan rates and then have that in your back pocket when you visit the dealership in order to compare, and have whomever you want to write the loan run your details.

    If you've got a good score and income that supports the loan then there just isn't the same sort of scrutiny over a vehicle as there is over a mortgage.

    That said for folks who are marginal approvals on an auto loan then it's wise not to do anything to upset the credit gods.
     
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  3. DTWBOB

    DTWBOB Silver Member

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    It might be a good idea to buy the car between now and the end of the year, depending on 'how hungry' the dealer is...
    you could get a good deal.

    though I buy mine in the spring so that it gets exposed to one winter's less rock salt which despite global warming still gets used where I live !

    DTWBOB
     
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  4. jbcarioca
    Original Member

    jbcarioca Gold Member

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    Car loans, especially through dealers, are less sensitive to credit quality than are otehr loan types. In any event gleff is correct taht any generic 750 score is probably good enough. You do not mention what you'll be buying, but that makes a difference to the financing options, as well as pricing.

    I would not do any pre checking at all, other than finding out what car loans rates are at your own bank, if it is a community bank or another with branch based decisions (except for community banks that is uncommon). Generally dealers can do as well or better, but you need to be heavily armed because they make their living mostly on credit and useless stuff like extended warranties and gimmicks.
     
  5. gleff
    Original Member

    gleff Co-founder

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    Indeed, after factoring costs including sales commissions (and this is a huge generalization) dealers don't actually make money selling cars. Extended warranties, extra protection paint coatings, and their service departments make money.
     
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  6. thepointstraveler

    thepointstraveler Silver Member

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    I would highly recommend you check out Pentagon Federal Credit Union @Penfed.org for a car loan (unless you buy new and can manage a 0% through the manufacturer) They are currently offering new and used car loans at 1.49% I have financed cars with them in the past and they have been great to work with.
    Generally you have to be a military member or government worker. However there is an easy way to get in. Penfed is also open to many military associations and anyone can join the National Military Family Association for a 1 time fee/donation of $20. Once you join NMFA you are eligible to join PenFed. Good luck!
     
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  7. jbcarioca
    Original Member

    jbcarioca Gold Member

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    That is good advice. Many credit unions can make such offers, but Penfed is one of the largest in the US and one of the most innovative too. Penfed also has a car buying service taht may save some money.

    Sent from my iPad using milepoint
     
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  8. daninstl

    daninstl Gold Member

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    I would go get a loan from a credit union prior to looking. If you are worried about the inquires I would be cautious about letting dealers send your credit app out to a bunch of lenders, while they pull the same day it seems like a waste of pulls unless you really need to do that. I also wouldn't tell the dealer you have your financing in place until the deal is done because they figure to make money on the F&I part of the transaction. Also if your buying new check with Costco to see if they can eat you a discount. If you want miles see if you can put the car on credit cards and then have the credit union fund it through them. Most dealers won't do that but there are a few that actually do give airlines miles on cars, although rare.
     
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  9. afakhori

    afakhori Silver Member

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    +1 on Penfed. We have two car loans through them and they are a breeze to deal with. I just went on base and picked up the check when I found the car I wanted. For my wife's car, the dealer just faxed and Purchase order to Penfed and we were out the door!
     
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  10. Dad to GO

    Dad to GO Silver Member

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    We just bought a new car and got a car loan through the dealership. I have been applying/churning cards for both my wife and myself all year. I figured that as long as our score was in the 750+ range that the loan and rate wouldn't be a problem. We got the best rate possible through the dealership 60 months and .9%. I personally don't think you need to worry about getting pre approved. Just shop around for the best rate... but honestly make sure you get the best price more than anything because saving a few thousand dollars on the total price is worth a lot more than 1 or 2% on a loan.
     
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  11. babykoala

    babykoala New Member

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    me too. +1 on Penfed.
     
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  12. emilyjames

    emilyjames Member

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    Current situation is different from previous year...
     
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