Shopping for a new vehicle, have bad credit?
Here is something you should be aware of. FICO scores do not apply to your overall credit rating when applying for financing on vehicles. After filing for bankruptcy in Michigan and after reaffirming two vehicles, I paid them off in full and was ready to buy a new vehicle. I discussed my plan with my Michigan bankruptcy attorney when filing and he told me I should get a loan before I file bankruptcy. The brick wall I hit was I already had two vehicle loans and I could not take on a third. The next problem is I filed bankruptcy a year ago and the interest rates were horrendous when I recently applied for a loan. This was somewhat surprising to me because I had pulled my FICO scores after 1 year of bankruptcy and they were in the upper 600’s which is not too bad being one year out of bankruptcy. This was when I learned FICO scores where not the be all for applying for auto loans. In addition, during the first year of bankruptcy I continued to pay on student loans and make my mortgage payments. In other words, you can continue to build a positive credit rating by making payments on time but it may not help you with getting decent auto loan rates after bankruptcy.
How can I find out the credit score for buying vehicles?
The problem is there is no place to pull these scores the dealers and car finance people are the only people that can pull the actual credit score to finance a vehicle. Therefore, if you have filed bankruptcy or are using some type of bankruptcy services like a debt management plan you really can’t get an idea of what your score is until you visit a dealer.
If the dealer has the credit score how can I negotiate?
The best method to use when working with a dealer is to tell them you don’t know how your credit it is and let them pull the credit score. The reason being since they only have access to FICO Auto Industry Option score you have to get them to tell you what the score is and then ask them their opinion about your score. Once you have this score you can shop around for your rates by telling them what your score is.
