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Question about low FICO score and loan?
Ok, I was off work waiting for VA disability for 13 months and as a result my credit score suffered. I also had 2 judgments placed while I was working that I was never served papers for, Both of those are paid off. I had a car loan with Ford Credit had some late payments 3 that were 60+ but they never put the car out for repo. I bought a car with a co-signer over 2 years ago and I have had 2 late payments in 2 years. One was my fault and the other was the banks fault. I made a double payment and the bank posted the extra payment to the balance.
So, last year I was looking around and saw a 1984 Corvette for sale so I applied for a loan with my bank. I got a call 10 minutes later that I was conditionally approved and had to verify some information and then later that day they called me and said that the loan was approved. With no money down and for a 3 year term. I asked the person in the loan department if it was rare to make a loan on a 1984. She said, ordinarily it would he out of the question, but there is a NADA value book for Corvettes and we were able to see the value so we made the loan." My interest rate was 13.5% and she said that part of that was my credit score and the rest was that they wanted to get the money back as soon as possible. She looked over my credit score and said after 12 on time payments I could refinance the loan down to the standard used car rate of 5.5% Keep in mind, I got the pre-approval in less than 15 minutes. Once I gave the bank the VIN and dealer number the loan was approved.
So now I have 2 car loans out, and a overdraft line of credit loan, and my FICO score has dropped even more! It used to be at 633 and now it is at either 576 or 611 depending on who runs it. Also on 2 of my credit reports the judgements are shown as not paid. One report says judgement A not paid, and the other says judgment B not paid and judgement A paid. I've been trying to get this corrected for 2 years. I just gave up on that.
Just to see my score I applied for a Fingerhut line of credit and got denied! That's where I got the 576 score from.
My debt to income ratio is about 11% total. Is there anyway that this will improve itself over time?
I am taking out a secured card from my bank and the card reports to the 3 big ones and converts to a regular card in 12 months.
Like I said both judgements are paid off. And my debt to income is about 11%.
I've disputed 2 of my reports 2 times and won each dispute, yet the inaccurate information is still on 2 of my reports. The court has recorded BOTH judgements as PAID. I asked my credit union about that and she said that she saw that both judgements were satisfied. She said "You'd have never gotten a loan if one or both was open."
The loan sailed right through applied at 10am and got approved at 2pm.and I even raised the amount to cover the tax and registration at the last minute.
The reason that I mentioned the VA is that while waiting for my claim to be approved I had to quit my full time job after my short term disability ran out. (Go from 4K a month to $240.00 a week, see how that feels) and had no income for 9 months while waiting for my claim to be approved. So I used my 401k, and I got a part time job. Then after a year I had to quit that while my case was being reviewed for a higher level due to injuries that were found during a physical. Again 15 months living on $877.00 a month. Take $425 off the top for car payment and insurance alone and you see where this is headed.
I didn't stiff anyone, in fact I paid my car loan off 4 months early. I had 2 credit cards and paid them off in full. The only reason I applied for a Fingerhut line of credit is that I know that if you are denied credit they have to disclose your FICO score. It had been 7 months since I took the loan out for the Corvette and I wanted to see what my score was. That's when
4 Answers
- bdancer222Lv 79 years agoFavorite Answer
You need to go back to the judgment holders and make sure the file the paperwork with the court to show satisfaction of the judgment. Once that is processed, your credit report will be updated to show the judgment paid. But that will not do a thing to improve your score. The judgments did the damage and will remain for the balance of the 7 year reporting period.
Your FICO score dropped when you took out that second car loan. Large new loans do that. It's new debt. You will have to pay on that loan for at least 6 months before it begins to even out.
You need at least 24 months of consistent, on time payment history to improve your score. Paying both car loans will help. Getting a secured credit card would give you another line of credit. Use it and pay the balance in full every month.
Frankly, I'm surprised you were able to get that second loan with all the negatives on your credit (2 judgments and late payments on the other car loan). Even with a years worth of on time payment history, I dont' think you will be able to refi that Vette for 5.5%. Your credit just isn't that good.
Debt to income ratio is easy to improve. Either make more income or pay off debts
Source(s): BD - Calvin CLv 79 years ago
it is not unusual when judgements are paid off a score drops there are many things involved in score as well as teirs. Debt ratio has nothing to do with scores. What is surprising you blame being on VA disabilty for not paying your debts. I deal with lots of people on VA disabilty and 99% of them get more money than if they worked and it is tax free. You may have had issues but doutful income was one of them. Your score will go up as you pay down the debt and stop applying for credit you do not need any more debts even though your ratio is low.
- 6 years ago
Question about low FICO score and loan?
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