[MrGatsby]

Originally Posted by BayMoWe335

Seems your story has been dressed up for the internet and/or you are not providing all the information.

675 is a terrible I think you meant (average) score and unlikely with what you say is 5 years of history and an income likely near $100K if your 6.5% pre tax story is true.

Bottom line, I don’t believe your story, but your credit is the problem.

Any person who has their head screwed on straight from a financial perspective as you convey would have never bought a car on 9.9% interest, period.

Not to be a hater, but there is more to this.

What would be the point of providing false information? I am seeking advice on a very specific situation, if this was in fact not my situation, it would render the advice useless. To clarify, I started building credit 4 years ago, but my average age of accounts is 2 years due to the recent auto loan. -- my issue.

I agree on the 9.9% rate, which is precisely why I am looking to get out of it. I was a young first time borrower, and I made a mistake. Lesson already learned.

[P1]

Assuming all other variables of the loan remained consistent, what are the real dollar savings now you went from 9.99 to 4.19? Can’t be that much, right?

[Run Silent]

Originally Posted by P1et

Assuming all other variables of the loan remained consistent, what are the real dollar savings now you went from 9.99 to 4.19? Can't be that much, right?

He would save about $250 per year, per 100 basis points in interest expense.

[MrGatsby]

Originally Posted by P1et

Assuming all other variables of the loan remained consistent, what are the real dollar savings now you went from 9.99 to 4.19? Can't be that much, right?

I haven't calculated the dollar savings, since I opted to shorten the loan from 48 to 36 months. my payments at 4.19% for 36 months will be just a few dollars higher than I am paying currently, but allows me to pay it off a year early.

Edit: Just did the math -- If all variables remained the same, on a 48 month loan, it's a $62/month difference between 4.19% and 9.9%. Over the course of the 4 years, it translates to a $3,000 savings.

[Hawkeye]

Now do the math on how much you save if you double your payment each month. It's well worth going a year without as much superfluous spending.

edit: I also agree with the above that 675 is a terrible score, it is only "average" because the majority of America is dumb with money. You don't want to be "average". I have a buddy that defaulted on 2 credit cards and went through the whole collections process, and within 4 years with just one secured credit card was able to raise his score to mid 600s. 675 is a poor score IMO.

Congrats on getting a lower rate refi. I can't believe you got talked into 10% off the bat, did you not have anyone that knows anything about finances go with you to the dealership?

[detroitm2]

Call up RateGenius. They'll get you squared away with another lender. My sister used them and had around the same credit score as you. Refinanced a new vehicle she just bought with 11% interest down to 5%.

[MrGatsby]

Originally Posted by Hawkeye

Now do the math on how much you save if you double your payment each month. It's well worth going a year without as much superfluous spending.

I have every intention of paying it off as early as I can.

edit: I also agree with the above that 675 is a terrible score, it is only "average" because the majority of America is dumb with money. You don't want to be "average". I have a buddy that defaulted on 2 credit cards and went through the whole collections process, and within 4 years with just one secured credit card was able to raise his score to mid 600s. 675 is a poor score IMO.

I agree with you on not wanting to be "average", which is why I am building credit. However I wouldn't call it a terrible score for the simple fact that a 675 will typically allow you to get any one of the main credit products -- home loan, auto loan, personal loan, or credit card. Albeit, you may see high rates, but you will typically get approved. My idea of "terrible credit" is that of someone who can not get debt at all.

Congrats on getting a lower rate refi. I can't believe you got talked into 10% off the bat, did you not have anyone that knows anything about finances go with you to the dealership?

The salesman pitched it as, "since you've never had a large purchase financed, the bank has to minimize risk for the first 6 months, once you establish timely payments with them, they will lower your rate after that 6 month mark. This sounded reasonable to me at the time, but looking back, was clearly the mark of a good salesman, and poor judgement on my part. I should have insured this was in the contract from the lender.

[Hawkeye]

Originally Posted by MrGatsby

The salesman pitched it as, "since you've never had a large purchase financed, the bank has to minimize risk for the first 6 months, once you establish timely payments with them, they will lower your rate after that 6 month mark. This sounded reasonable to me at the time, but looking back, was clearly the mark of a good salesman, and poor judgement on my part. I should have insured this was in the contract from the lender.

If that happened to me I would be sending an email to the GM or relationship manager of that dealership and telling them of this. Someone who is young and already buying nice vehicles is someone they like to keep around. Then again, I know some people on here have had poor experiences even with getting new expensive vehicles every few years so how they deal with your feedback should let you know if you should consider them for a purchase in the future or not.

Personally I have always had good luck just stating what happened and what I was not happy with. Don't threaten or anything like that and you might be pleasantly surprised.

[tcphoto]

Originally Posted by MrGatsby

Update: found a co -signer with stellar credit. PenFed reconsidered my app with the cosigner and approved me at 4.19%.

Thanks for the recommendation!

Congrats on the savings, now I'd work hard at eliminating the credit card debt and getting the FICO above 750.

[Clark_Kent]

Originally Posted by MrGatsby

Update: found a co -signer with stellar credit. PenFed reconsidered my app with the cosigner and approved me at 4.19%.

Thanks for the recommendation!

Good for you. Congrats!

[MrGatsby]

Honestly, it's just not worth the time. While the salesman may have took advantage of my neivety, at the end of the day I signed the contract and that's on me. Besides, I feel as though they should have done right by me the first time in order to keep my business in the future.

[Hawkeye]

Originally Posted by MrGatsby

Honestly, it's just not worth the time. While the salesman may have took advantage of my neivety, at the end of the day I signed the contract and that's on me. Besides, I feel as though they should have done right by me the first time in order to keep my business in the future.

Yeah. That is the whole point of writing the GM. You can make sure the leadership knows of their staffs actions so they can correct it if they want to. You may not even use them again but you could be helping someone else down the road.

[bimmerfrk]

i use DCU 1.9% on my m4

[tdott]

Originally Posted by MrGatsby

Unfortunately the 675 is simply due to lack of credit history. 4 years ago I started the process of building credit.

Not true in every case.
I moved to the US from Canada and had to start over basically. That was in 2016, 3 years in and I recently crossed over into the "Excellent" range. with only "Oldest Credit line" in the "Average" range in the broken down sections.

But I am older, have a mortgage (at a great rate <4%), only 1 new account in the past year, and 1 inquiry.

Sign up for creditwise.capitalone.com and see the break down of your score and what you can do to improve it.

Goodluck

[Alfisti]

This US obsession with credit score absolute staggers me, what a convoluted system.

[detroitm2]

Originally Posted by Alfisti

This US obsession with credit score absolute staggers me, what a convoluted system.

Right.. Lets just do it like the UAE does! If a bank gives you a loan, and you don't pay it, they throw you in prison.

I prefer our way. Just pay your bills on time and credit score wont matter after a while.. If you get a setback, you get a setback. You may pay a bit higher interest for a bit, but thats the price you pay.

[Joekerr]

Originally Posted by Alfisti

This US obsession with credit score absolute staggers me, what a convoluted system.

Originally Posted by detroitm2

Right.. Lets just do it like the UAE does! If a bank gives you a loan, and you don't pay it, they throw you in prison.

I prefer our way. Just pay your bills on time and credit score wont matter after a while.. If you get a setback, you get a setback. You may pay a bit higher interest for a bit, but thats the price you pay.

Actually....


Really not a bad idea. If you want to MAGA.

Might have to pull a play from the English playbook and annex Australia and turn it back into a penal colony just to create the space needed to house all the prisoners. On the bright side, since pretty much every living thing in Australia can kill you, you'll be able to continually ship more prisoners over - you'll never run out of space.

But just think - if everyone in America actually spent within their means and didn't over extend themselves - how society would change! You'd have people a lot more diligent to work in order to pay off debts, which means increased productivity, which translates to more goods to export. You could be the next China!!!

Yay!

[Alfisti]

Originally Posted by detroitm2

Right.. Lets just do it like the UAE does! If a bank gives you a loan, and you don't pay it, they throw you in prison.

I prefer our way. Just pay your bills on time and credit score wont matter after a while.. If you get a setback, you get a setback. You may pay a bit higher interest for a bit, but thats the price you pay.

But why so complicated? Here and at home (AUS) the bank just look sat your income, looks at existing debts and looks at exposure to debt (credit limits unused) and checks if you've not paid debts in the past.

Boom, done.

You guys fuck around with this cockamamie formula and conditions that increase or hurt your credit rating and taking on debt to flesh out your score etc etc.

Since we opened a US office i have been gobsmacked by the level of just plain old disorganisation, unnecessary layers, jurisdictional overlap and general bullshit you need to hop through to get anything done in the states. And we are in red states!

The amount of paperwork to hire an employee is twice as much as in Ontario and it's run by idiots here.

[detroitm2]

Originally Posted by Alfisti

But why so complicated? Here and at home (AUS) the bank just look sat your income, looks at existing debts and looks at exposure to debt (credit limits unused) and checks if you've not paid debts in the past.

Boom, done.

Its really not that complex, But theres a myriad of different systems that can be used. Its all about reducing exposure to risk for the lenders. and is basically what you stated above put into a number.

Originally Posted by Alfisti

Since we opened a US office i have been gobsmacked by the level of just plain old disorganisation, unnecessary layers, jurisdictional overlap and general bullshit you need to hop through to get anything done in the states. And we are in red states!

The amount of paperwork to hire an employee is twice as much as in Ontario and it's run by idiots here.

This is completely unrelated to credit, but a lot of that red tape has to do with ensuring the employees are protected. We have much more strict employment laws here than many other parts of the world.

Its not difficult once you get a system in place. We can onboard new employees in our HR department in a matter of minutes.

[Alfisti]

Originally Posted by detroitm2

We have much more strict employment laws here than many other parts of the world.

Um no. Compared to Canada and the Australia you have the wild fucking west. It's a million times easier to let someone go in the US than here, it's not even remotely close.

It's all related to the power given to the municipalities (mostly) and states to meddle in what should be federal issues.

[Dogeeseegod]

+2.5% on a simple interest loan with the payment being that small? Who cares. make double payments and clear it off your debt. You haven't paid anything off with any real value, that's what the banks are seeing. Pay that car off ASAP and you'll be getting much better loan rates. Plus cleaning an auto loan off your debt will give you enough point boost to bounce to the 700 range.

[Hawkeye]

Originally Posted by detroitm2

We have much more strict employment laws here than many other parts of the world.

Originally Posted by Alfisti

Um no. Compared to Canada and the Australia you have the wild fucking west. It's a million times easier to let someone go in the US than here, it's not even remotely close.

It's all related to the power given to the municipalities (mostly) and states to meddle in what should be federal issues.

It is immediately apparent that detroitm2 has never worked outside of the US. The employment system here is ridiculously more relaxed and geared towards the employers than most other first world countries.

I will say that I like our credit system though, there are a lot of people here that make good money yet they spend more. You have to actually pay attention to all of the things that you mentioned but the only other (smaller) parts of our ratings are average account age and number of hard credit pulls (which is smart). If someone opens 5 credit cards within a year, even though their available credit is high and their debt to income might be low... who is to say they know how to manage it and aren't going to max every last one of them?

Honestly, our credit system is pretty easy. Have open credit lines that you pay on time, don't bunny hop around and keep opening and closing account, and you should be good to go. You don't have to dote over it or be rich to have a great credit score (trust me, I know)