NewGTGuy

So, let me start off by saying I'm new to the board. I'd like to thank all of the contributors as the information folks can find here is invaluable.

Now, to my issue. I went to an Acura Dealer here in the Seattle Area. I'm cool with paying sticker for a new TL Type-S, since they are new that's the way it goes.

So, I'm getting a loaded Type-S for ~39K. I told the sales rep I have bad credit ( I have a few 30 day late payments but no collections or bankruptcy). He asked me what I thought my credit score was. I told him I didn't know, however I'm willing to put $20K down and would that make a difference. He said it would. I filled out a credit app and waited.

He came back and said "IT doesn't look good. We can probably get you financed but your payment will be $570/month with a loan amount of ~$24K (39K purchase price - 20K down + tax + license + fees). The term of the loan is 60 months. I said "Wow, even with bad credit that seems high (and it is at 13% interest) what's my credit score?" He then told me it was 580.

Well I went home and did some research. What he told me is not true. My credit score is ~650 depending on the credit bureau. With this score, I feel 13% is outrageous. I now believe he is being dishonest about my credit score to charge higher interest and get paid more commission on the back-end of the deal.

My guessing is what would some of you do in this situation?

They do have the exact car I want. But, I'm still willing to walk if I'm going to get screwed.

Thanks for any advise in advance.

NewGTGuy

VelfarreClubber

Did you triangulate your credit report indicating 3 different scores from 3 different credit bureaus? you would be surprissed at how different your score would be. Try financing with your bank or better yet a credit union most likely you would get better results.

mojo risin

That is terrible! If a dealer came back with that I would not buy the car there. That is beyond greed. Try to find a credit union or try online banks (i.e. Lending Tree).

superfloofay

I would go to another dealership and see what THEY say about your credit.

b23g000

First and foremost, congrats on WALKING OUT OF THAT DEALERSHIP!

Secondly, I am about to be a little long in the post, it might help or might not but this is what I typically try and do before a purchase of something large.

Since I am paranoid about ID Theft and anal about keeping my credit up to par (You never know when you need credit for something) I like to do the Equifax 3-1 solutions, it gives me an idea what each union has on me and a decent representation of my FICO. Obivously they will vary in the report as well as the score but usually not by much. If there is any discrepancies you should dispute it right away.

With that said, I try to be as knowledgeable on all fronts of a purchase, especially if it can or will affect my credit and mean the difference between 200 bucks or 5 points on your payment or Rate. I also like to get my loan squared away first so I have options when I do finally sign on that dotted line. Basically, I go to Capital One to see if they will approve me, if they don't I won't buy a car, if they do I now have the funds along with a Baseline Rate I can work with when I sit down with the Finance Guy. If they insult me, I just sign the Capital One check and be on my way. If they are great to work with they will alway beat the rate you have with Capital One. Hey it's more money in their pocket while you get to trim a little off the top from your monthly payments.

Typically the more you know about the situation and what to expect the better you are to negotiate and counter. Never go into a dealer salivating at the mouth. This will kill your ability to negotiate and play hard ball with them. They know from the first time they meet you, they are going to sell you this car at whatever price they want.

I personally would never go back to that dealer, find another one and work up a repoire with them. Also the SA doesn't need to know your financial history before you negotiate, you work that out with the Finance Guy.

Sorry if I got long winded...

Good luck with the purchase

erdoc48

To b23g000, I have concerns about credit theft as well. I live in NJ and you can always put a freeze on your credit report (depends state to state) by writing to the 3 credit bureaus- you are then issued a PIN # to lift the credit freeze if you want. This way, even if someone has your SS# and /or birthdate, it's useless to them. Many other states have this option as well. You can lift the credit freeze temporarily if you want to- I know this is a little off topic, but you might be interested.

I agree with you that I usually try to get financing before going to the dealership. Once I have it at a good rate, I then try to get the dealership finance dept. to go lower than the rate I have (competition is a great thing).

cgriffin33

And just remember that the interest rate from Acura financing can be negotiated just the like the price of the car can. The salesman started drooling when you told him you think you have bad credit, because that left the door open for him to charge a higher interest rate and hoping you would bite on it. I'm sure if you go back and bring the credit score you have that interest rate will drop. But like mentioned in this thread already, find a loan at another bank or credit union and use that as your bargaining chip with Acura financing. Good luck.

ggesq

iTrader: (1)

Along with trying another dealer and going to your own bank to secure financing I would suggest not telling the salesperson that you think you have bad credit. You are tipping them off.

Formula 350

If you got a bad credit score... you will be hard pressed to get a good rate unless you are with a credit union....

And I know I will get flammed for this, but maybe you should not be buying a $40K car if your credit is that low.... pay off some debt, save up some money... being late is not the only thing that hurts your credit score..

CobraGuy

As a senior officer for a very large bank, I can tell you that the dealer may indeed have been correct with your score...as could have you. There are three bureaus. Depending on which one he pulled, and which one you pulled, they both could be correct. When we do a mortgage for example, we pull ALL THREE and take the middle score. Not all lates are reported to all three bureaus...thus the large discrepancy.

A 580 is not good...and most places won't finance you with that score. Typically, you have to resort to finance companies and pay the interest rate you were quoted. A 650 is still below normal, but not horrible. Still you won't get the good rates. As an example, my wife has a middle score of 823 last I checked. That is one of the highest I've ever seen....and I see reports every single day. The difference in rates she would get compared to a 650 is unbelievable. Not only that, she would never be required to provide documentation.

Just a small bit of unsolicited advice. Your credit is your life. Fix it. Simply reduce your revolving debt, limit your inquiries, and pay your bills on time. In a few short years, your scores will have soared. A BK is the kiss of death, but we don't give collections as much weight as we do a poor payment history. Nor do the bureaus. So get your scores up. Do you know that there are quite a few companies out there that won't even hire you with bad credit? It's something to think about.

CobraGuy

He won't need to worry about tipping them off. They will know in about 10 seconds.

CL Platano

Go to a different dealership and try a credit union.

jupitersolo

^^ Yes a Credit Union. With putting down over 50% the CU will give you a better rate.

your_mom

First, 650 is not as terrible as CobraGuy makes it out to be. You're slightly below average, not in the basement. 13 percent is ridiculous.

It's a well known fact (see Edmund's series of articles regarding a writer who went undercover as a car salesman) that F&I guys lie about credit scores to jack up the interest rates - and they prey on those who mention their credit is not so good.

Talk to your bank, credit union, etc. about getting a loan and then find another dealer and negotiate from there. 8 - 10 percent should be in the ballpark for your score.

lembowski

iTrader: (1)

Is it true that you can refinance a car loan after a year. I thought that you could do that and get a better interest rate. Maybe after a year of making the payments on time and getting all your other finances together it would be better? I dunno

b23g000

Good stuff...

Yeah, when I was 24 I knew I wanted to buy a house before I was 30 but my Credit was jacked due to very poor decisions with credit cards, loans and buying stupid sh!t! I think I started off with a FICO of 550 when I began the trek to build my credit. After much dispute, painfully paying down my debt and making sure all payments are on time, I am now in better command of my finances. my FICO has peaked to 805, I closed on my house early this year and I am able to obtain loans or credit for just about anything. (I DON'T ABUSE THIS since this can be reflected negatively on your credit). I have helped my wife go through the same process and she started worse off then I did.

What's the moral here? Get your house in order before making those big ticket purchases. I was once in the "My credit sucks" group and got reamed on several occassions all because I wanted it now and not later attitude. Boy did I pay for it. It does take a lot to step back, breathe and think things through.

erdoc48,
as you can see why I might be a bit paranoid and anal about my credit. I worked so hard to build it, I don't want to lose it. Plus I have heard too many horror stories of people stealing another persons identity, some were really close to home as some of my family members have been hit with it. But thanks for the tips, I plan to keep that in mind if something ever comes up. Knock on wood it doesn't.

lembowski,
Yes if you pay your car note on time after a year you can apply for a new loan. However you should be trying to clean up your other credit blemishes to. Don't just rely on the car note.

lembowski

iTrader: (1)

yeah thats why I also said "making the payments on time and getting all your other finances together it would be better"

I think I may try looking into that. My credit wasn't the best at the time I purchased since I just got out of college and had a few credit cards that were full. I put down close to $10k on my car and over the past year I have paid off my credit cards completely, and always been on time with my car note payments. I might have to look around at other credit union's to see if there are better deals out there. I had a 675 score and got a 6.75% interest, and definately think I can get that lower now.

geekybiker

When you say "I have bad credit" at a dealer, you might as well be saying "Dont worry about using lube"

Get approved online and walk into the dealer with a check next time. Also dont discuss payment options untill you've settled on a price.

geekybiker

Not much. I have like a 780 or so and the auto rates are much higher than they were a couple years ago. IIRC 6.5 or so was the best rate a couple months ago.

b23g000

Lembowski,
Sorry about the general statement. I usually just skim posts and might miss a few words from time to time...

laidback93

Yeah at the time I financed my car loan my FICO was 797 and the best rate I could get was 6.2%. Now this was for a used car, so I guess that wasn't bad.

jzacuto

You might want to secure financing either at a credit union or the bank you've always used. You don't HAVE to finance through their company, so why bother with their attitude if you don't hafta? Good luch!

jay_hawk

1) you should be able to negotiate below MSRP, even on the type S. I got 10% off last week.
2) get a loan before you go into the dealer. 650 credit score isn't that bad. I sell mortgages as a side business, and that would not put you into a high risk class. I don't know your financial situation, but if you do not own a house yet, you may want to wait before you commit to a $570/month car payment, it will make getting a mortgage more dificult. If you own a house, see if you can get a line of credit on the house so that the interest becomes tax deductible. I still recommend paying off the loan as fast as possible, even though your minimum payments are low on 30 year amortization. A car is probably the biggest financial hole people put themselves in.
3) go to a different dealer

NewGTGuy

Thanks everyone for the advice. I went to my bank and they offered me a much better rate. I called the dealers bluff and they were forced to match it. So, now I'm the owner of a new 2007 TL Type-S. Black exterior with a Taupe Interior. Really like the car.

As far as my credit goes, I did find some mistakes in my report. I do own a house so I'm all set there. My home loan actually shows payed "current" the first month I got it and 120 days late for the second month. This is an obvious error as a loan which is 1 month old can't very well be 120 days late. I've never made a house payment late. They automatically withdrawal the payment on the 16th of every month. I'm going to call them tomorrow and get this taken care of.

One other thing, I'm not so concerned about the interest rate as I'm paying the care off in the next month or two (just wanted it now <-- I'm a typical American). I also made sure there is no prepayment penalty.

Again, thanks for all of the advice. Now that I'm in the TL family I plan to spend a good amount of time on this board.

Have a nice evening!

Brian

b23g000

NewGTGuy, Congrats!!!
Enjoy and provide pics / feedback / tips on your new ride.

I should be joining you guys soon, CBP / Eb-Si / 6spd, coming off the truck at the end of the month. Can't wait!

CobraGuy

Incredibly wise young man.

CobraGuy

Did you even read what I posted? Or did you just arbitrarily shoot your mouth off?

Again, you must remember most institutions pull just one score of the three. Having all three be the same is near impossible. I've seen thousands of credit reports...I have never seen that. It is very possible both scores you received were correct. But you need to find out for yourself. Go to the bureau's websites and request your credit report. Dispute any errors.