Credit history?
I opened my first credit card 8 months ago along with another one a few months later. A few days ago I applied for a 10k loan so I could buy a car. I got rejected. When I looked at my credit report it was 702 & I paid all my bills on time. Why would I have gotten rejected? I know I don't have much too much history so could that be it? If so, about how long would I have to wait before a company would accept me for loan?
Public Comments
- It was most likely due to your debt ratio. If you are not making a certain amount for your debts, your ratio is too low.
- Not having enough credit history would be a good reason you got denied. Look into the website below and read it all, especially the "how credit scoring works" section and this might give you a better idea of what you need to get approved!
- 702 is a very good rating but maybe you didn't meet the income criteria.
- More info is really needed here. Did you apply at a car dealership or a bank? If you applied directly with a bank, I would try a dealership. They have access to more lenders and can find you a great rate. They also have their own financing and you may be approved for a 0% loan. Banks are very strict on their lending policies. Dealers can help a lot. I would not wait based on one rejection. 702 is a great score and you should qualify through another source. Obviously, your debt to income ratio can't be horrible, or your score would be lower too. TRY AGAIN.
- This is what makes up your score: 1. Payment history-35% 2. Total debt owed vs. available credit-30% 3. Length of time establishing credit-15% 4. Types of credit established-10% 5. Inquiries and new accounts-10% The reason why you got rejected is because of #3 & 5, mainly. If you just opened your first credit card 8 months ago, and another one a few months later, you shortened the average age of your accounts making it look like you recently established credit more recently that you have. It's going to take at least a year or so on both accounts to actually develop. Also, there are some criteria to take into consideration when it comes to buying a car: 1. LTV (loan to value). 2. Term requested. 3. Age of vehicle. 4. Miles on vehicle. 5. Down payment amount. 6. Time at job. 7. Time at residence. 8. Monthly income before taxes. 9. Credit score/profile. There could be a number of things that could've caused you not to get your car. My suggestion would be before you go to purchase a car would be to get financed before you even hit the showroom floor. This is where a credit union would come in handy. They're slightly more laxed than a regular bank when it comes to financing. Also, you might want to see what kind of first-time buyer programs that the dealer offers.
