No Stimulus Spending From Me :(

gtaus · April 2009

This is not a political rant. But it doesn't have much to do with guitars either. I am just venting.....

My wife's car broke down this week. Anti-lock brake system shot. Would cost more to fix the system than the car is worth. I am always getting mailers from the bank saying I am \"pre-qualifed\" for a car loan for $25,000-$30,000. So I call the bank and apply for a loan for $10,000 to buy a used car. Turns out I only actually \"qualify\" for $2,000. Wow! That is a disappointment. So I ask what my credit score was and they said it was 762.

Can anyone explain to me if a credit score of 762 is good or bad? I'm really bummed and wife is not happy with life - which you guys all know what flows downhill......

kjrocks · April 2009

762 is not a bad score. There must be other factors at work against you.

partch · April 2009

Yeah I agree something else? 762 is decent. I think actually I'm somewheres around that.

shredd · April 2009

762 is plenny good. The absolute max is 850, which few achieve.
I'd bet the reason you can't get a bigger loan is because of the frozen credit markets, which resulted from recklessly pursuing profits by lending hundreds of thousands of dollars in house loans to idiots with credit ratings of 466. :evil: :evil:

It's also possible your credit score is not why they won't lend you a decent amount. I'm willing to bet they've been limited on what they'll lend to who, since there's such limited capital available for lending and they have to maximize their profits to offset the losses they're taking on all the bad loans they're carrying. So you get screwed from both sides - no loan from the bank, no nothin' from the wife (except misdirected hostility

).

Don't feel bad. My most recent credit score was 815, and my bank wouldn't even lend me a few bucks for my Shania Twain Fan Club membership dues.
But lucky for me, Shania couldn't possibly care less...I'm not married to her...

gtaus · April 2009

I don't know what's up. At the time they offered me a $2000.00 loan, I had over $3000.00 sitting in my checking account at the same bank, and substantially more sitting in our Roth IRA's over the past 10 years.

I could put $2000.00 on any of my credit cards and never feel it as I don't carry a balance. I might not be in Shredd's financial category, but I do have a number of credits cards with limits in $25K+ range (which I don't use, $0 balance). I also have mortgage lines of credit (multiple houses), but I don't want to borrow money against a house for an automobile, although that might be my only option other than paying cash. But I really don't want to have to pay cash and wipe out all my \"immediate/emergency\" money for an automobile or put it on a credit card, which is why I applied for the loan.

I'm not worried because I have two older cars in good running condition and my wife is driving one of them until we find a car for her. She has settled down a bit from day one when her car died. But I think she also heard from her work that other people with decent credit ratings cannot get auto loans either at this time. I'm thinking the bank is not telling me the whole story. When they offer you a loan for less than the cash sitting in your checking account, something's not right.

Tal Rules · April 2009

Might be easier to get financed on a new vehicle. Plus you get a cheaper interest rate.

shredd · April 2009

\Tal Rules\ wrote:

Might be easier to get financed on a new vehicle. Plus you get a cheaper interest rate.

What he said. A dealer would LOVE to sell you a new car, and would bite his own butt to get you the financing.
It also occurred to me that despite your good credit rating, the banks balked at your existing and potential \"debt load\". You have several houses, and credit cards with no balance but huge available lines of credit. I'd bet they're concerned that you aren't able to support the amount of debt you have/want, and will default on it.
Which, of course, means securing your car loan with a tangible asset they can take from you if you can't keep up the loan payments. I suggest offering your wife. :P

gtaus · April 2009

I have wondered about the open credit card limits and unused mortgage line of credit problem. But most of what I have read is to keep those lines of credit open and not close them. It is true, however, that if I wanted to max out all my lines of credit, I would have a hard time paying it all back. Maybe I need to relook at those unused cards.

Shredd, as far as the wife... reminds of a story of two guys sitting at the bar, both extremely depressed. One asks the other, \"why are you so down?\" He replies, \"my wife left me\" and then asks \"why are you so down?\" Well, the other replies, \"my wife left me, but then decided to come back.\" Somehow I think you and I could be those two guys......

shredd · April 2009

\gtaus\ wrote:

\"my wife left me, but then decided to come back.\"

Reminds me of that old joke about the guy looking for a wife: \"gentleman seeks wife with fishing boat. Please send picture of boat\".
Or one of my favorite song titles ever: \"How Can I Miss You If You Won't Go Away\".

Annnnyway...you might consider consulting someone more expert in credit affairs; maybe even the doofs at the bank, if they'll talk to you. They're probably more interested in making money off of you than helping you. But it's worth a shot...

BettyBoo · April 2009

Even though you have a good credit rating (or credit score as you call it) right now isn't a good time to be borrowing money here and its probably much worse over there in the States. The wife and I have recently bought another house this year and we just got another $50K personal loan on top to spend on the house and land. Actually, we got a huge shock at what our actual credit limit could be - no wonder people get in financial strife. However, I found it interesting what the bank discussed with us. The problem with the banks at the moment is that they are not so much worried about your credit history, but your 'real' ability to repay the loan in this time of job uncertainty. They told us they have knocked back plenty of people based on the kind of industry they are employed in at the moment even though their credit history is really good.

So even though you might have a good credit history, they might be worried about the security of the industry you are employed in. We are lucky because our employment is not directly effected by this global financial fiasco hence we got our money. But maybe the bank not giving you the loan is a blessing in disguise. I know the car dealers are flat out like a one legged man in an arse kicking competition to sell new cars - but its still cheaper to maintain a car you already own, especially if you don't owe any money on that car. Remember, the quickest and easiest way to make money is not paying interest. I know a lot of people who've got into big financial trouble because even though they couldn't actually afford the new car they wanted, they still wanted the car NOW! Quite often it was because the wife wanted it :roll: They all should have waited till they were more financially secure. On the other hand, if you have that money its a fantastic time to be buying new cars especially.

I'd also be checking out what $$ the banks have valued your other properties at. I'm not real sure whats happening with the real-estate market over there, but here values have dropped overall. In any sense, banks usually don't refuse a loan for no good reason, but they can be a law unto themselves too I guess. There's no doubt though that the US banks just don't have the confidence in their own financial security at the moment. You might just be the person who is suffering for it! :roll:

Just go buy shares in a BEER COMPANY!

History shows that revenue from beer sales actually rises during periods of financial hardship - at least it does here in Oz.... :twisted:

Olah · April 2009

gtaus - the credit card companies HATE people like you dude!!! You don't use your huge possible credit limits ($0 balances paid off every month, oh...they can not STAND you!) They want people carrying balances. They want to charge you monthly fees for late payments. They get off on that inflating interest rate that they have been allowed to vampirically suck the majority of Americans dry with.

Good for you though man. Admirable position with your situation, not getting caught in their many crippling traps!

I agree with the new car idea. Those guys are doing ANYTHING to get rid of new cars. Cars are sitting in lots by the thousands. And sitting on loading docks in shipyards waiting to get to the lots, as the car companies are laying off people because no one is buying a new car. Get an EV or hybrid and get a big tax credit!!

Manitou · April 2009

Clark Howard is a great place to find financial answers.
http://clarkhoward.com/

I also agree about buying a new car. MUCH easier.

spudler · May 2009

I havent checked my credit score or tried to get any loans but ill bet since my ex hoosed me on IRS credits and money owed to me i bet by now my credit score is 0 or lower im not to worried about it now though I have always lived on cash and if i have the money i can get it if not i save for it it sucks though cause i have missed out on some awesome deals ive seen on craigslist and driving seen some cool muscle cars that were dirt cheap i coulda made a killing off of but I am happy enough have a roof so far and i have food to eat internet electricity

although now i think about it credit might be nice although my luck id get something i really wanted car/house then loose my job(my next one that is) and all the cash i put up to get into it sorry not trying to be a downer

happy happy smile smile

Suspect Audio · May 2009

I teach a class on consumer credit and how it works. I have a PowerPoint I would be happy to upload (not sure how) or I can email it to whoever would like to check it out. Send me an email.

cmlafata1@msn.com

Chris

jamminmj · May 2009

We gave em billions to bail them out and then they turn around and raise the fees and percentage rates on us. Double Jeopardy. The real reason the market crashed in my book is because there wasn't enough real cash to cover everything to begin with. They stuck it to us and will keep on stickin it to us.

judaskiss · June 2009

Gtaus, just my 2 cents. My dad used to be on the loan committee for the credit uniion at the company he worked. There are so many things that they consider when approving someone for a loan, especially now. To begin with just about anybody can be pre-qualified--you're breating...right. Pre-approved means they have acually checked out your history. To me, pre-qualified is just another way of advertising. Now, with that said, it also depends on who acually looked at your app. We are all human--I think--two different loan officers can come up with two different decisions. Your score is good.

It also depends on how much credit you do have. Even though you may be paying all your bills on time, they may think their loan could be the one that breaks the Camels back.

Plus, now you have what economic times we are in to consider too. What industry are you in? If your industry is on shaky ground, they be scared that you're going to lose your job.

I wouldn't have too many open 0 balance cards open, then they think--You're not only going to lose your job, but you' re going to start using cards to keep up with bills and then your really in a pickle.

Tal was correct on new car as well. Try to get a list of dealerships that are closing. I heard that they are making deals on cars from 50%-60% off. Chevy Cobalt for less than $10,000--something to think about.

Manitou mentioned Clark Howard--this guy is good and has a staff ready to help with any questions. I asked a question on line once and they called me the next day to give me an answer. Clark does not like doing anything on credit, so he would prob suggest saving for a car.

Anyway, I don't want to turn this into a magazine article, but I hope that helps a little.

gtaus · June 2009

I have been attending school the past two and half years, mid-life retraining, and just finished. So my recent working income history has been nil. I have a number of rental houses but the bank considered all that money as unverifiable. I am still living off my savings and my rental income pays my bills. But I'm not getting rich.

The problem I had with the bank was that the bank offered me less loan money than I had sitting in my checking account at the same bank! They also hold our retirement IRA's and home mortgage - never missed a payment in 10 years. I know a few years ago they would not have denied me a good loan for a used car. Times have changed.

But it's all OK. I hope to get a job later this summer and then I will be able to get a better car. I too have heard about the great deals on new cars, and that is what I really wanted to look at AFTER I start working again. The new car is going to be for the wife, but I was able to fix up the old one and it is running good again. I hope it lasts until I have settled into a new job and can afford a better car.

As far as credit cards, I have read some articles that suggest closing out unused credit cards, and other articles suggesting keeping those same cards open. I have lots of unused credit. I could litterally buy a new car with my unused credit. I just don't want to. I like to pay for things right now and not run up my credit card bills. The only long term obligations I carry are the home mortgages. I do have home equity line of credits that could be tapped, but honestly I would rather wait for a car purchase than put the cost against one of the houses. I am very hesitant to use those equity line of credits as a credit card or for purchases not related to home improvement. It would be really easy to get myself in trouble.

Thanks for the comments.

Manitou · June 2009

\gtaus\ wrote:

As far as credit cards, I have read some articles that suggest closing out unused credit cards, and other articles suggesting keeping those same cards open. I have lots of unused credit. I could litterally buy a new car with my unused credit. I just don't want to. I like to pay for things right now and not run up my credit card bills.

I agree with not using a credit card on any major purchase. But I wouldn't go closing any credit cards, especially now. Any unused credit cards, Banks are now closing on you...and you don't want that, because it adversely affects your credit score. If you drop a card, it adversely affects your score the same as if the Bank drops your card.

Any unused credit cards, you should use at least once every 6 months, to keep them from being closed on you. Just buy your gas, or even lunch one time, and pay the bill in full, when it is due. This will keep your credit card in good standing, and help you keep your FICA score up.

gtaus · June 2009

That's a good point about using the card just every once in a while to keep it open. Most of the cards I don't use at all. My FICA score is good, but my lack of current income while going to school has limited my options. Hopefully, that will change soon.

gtaus · June 2009

Just an update to bring this thread to a close. My wife's car died again last week. This time it was the fuel pump. No big deal - to me - but the wife took it hard (on me). Took it to a local salvage yard for repairs. I'm having them essentially rebuild the engine with new gaskets and seals and fix the fuel pump. It will be my car when I get it back from the mechanics. The car was leaking oil pretty bad and I thought any money would be wasted unless I had the engine redone. Anyway, total repairs will be less than a month and a half for a new car loan, if I could even afford a new car.

I ended up buying a used Toyota Camry for my wife last Friday. I paid cash to a private party. The car is in good condition and I expect it to last at least another 5 years or more. So at least the guy I bought the car from will have some stimulus money for spending. Still not too happy about being turned down for a used car loan given my past history and credit score, but I understand that I'm probably not the best candadite on paper given I'm between jobs at the moment. Oh well, the wife got her \"new\" car, I didn't have to get a loan, and everyone seems to be happy for the time being. Maybe it was meant to work out that way.

No Stimulus Spending From Me :(

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