Does your income affect your lease/finance?
#1
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Does your income affect your lease/finance?
question, do dealers ask for either a bank statement or paystub or letter from your employer stating your annual/monthly salary when working out a lease or finance?
If you make a decent salary, will that help you in terms of getting a better rate? or is it solely based on FICO score?
If you make a decent salary, will that help you in terms of getting a better rate? or is it solely based on FICO score?
#2
AFAIK, it's based solely on your FICO. A lot of factors go into determining your FICO. FWIW, I've never been asked to provide pay stubs or any bank/credit statements.
http://wiki.answers.com/Q/What_is_a_FICO_score
http://en.wikipedia.org/wiki/FICO_score
http://wiki.answers.com/Q/What_is_a_FICO_score
http://en.wikipedia.org/wiki/FICO_score
#3
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Depends on your credit. If you have had past credit isssues, then a finance company may ask you to provide proof of income. Also, it's not just about the FICO. You could have a 750+ score based on one credit card with a $500 limit that you have had for a year and paid well. On the other hand you could have a 650 score with some slow pays but a history of having made payments on cars, credit cards with higher limits, maybe some mortgages and a few small collections. Believe it or not, the 650 is a better risk because there is history to go off. SO FICO is important, but the depth of your credit file plays a bigger role.
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If buying any vehicle impacts your daily living to the point where you can't save money, you need to buy a less expensive vehicle.
Jeopardizing your or your family's future for a depreciating asset is not the way to go-
Jeopardizing your or your family's future for a depreciating asset is not the way to go-
#5
Depends on your credit. If you have had past credit isssues, then a finance company may ask you to provide proof of income. Also, it's not just about the FICO. You could have a 750+ score based on one credit card with a $500 limit that you have had for a year and paid well. On the other hand you could have a 650 score with some slow pays but a history of having made payments on cars, credit cards with higher limits, maybe some mortgages and a few small collections. Believe it or not, the 650 is a better risk because there is history to go off. SO FICO is important, but the depth of your credit file plays a bigger role.
Credit scores are designed to measure the risk of default by taking into account various factors in a person's financial history. Although the exact formulas for calculating credit scores are closely guarded secrets, the Fair Isaac Corporation has disclosed the following components and the approximate weighted contribution of each: Dayana Yochim. How Lenders Keep Score. TheMotleyFool. Retrieved on 2008-02-29.
* 35% — punctuality of payment in the past (only includes payments later than 30 days past due)
* 30% — the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
* 15% — length of credit history
* 10% — types of credit used (installment, revolving, consumer finance)
* 10% — recent search for credit and/or amount of credit obtained recently
The above percentages provide very limited guidance in understanding a credit score. For example, the 10% of the score allocated to "types of credit used" is undefined, leaving consumers unaware what type of credit mix to pursue. "Length of credit history" is also a murky concept; it consists of multiple factors — two being the oldest account open and the average length of time an other accounts have been open. Although only 35% is attributed to punctuality, if a consumer is substantially late on numerous accounts, his score will fall far more than 35%.[citation needed] Bankruptcies, foreclosures, and judgments affect scores substantially, but are not included in the somewhat simplistic pie chart provided by Fair Isaac.
Current income and employment history do not influence the FICO score, but they are weighed when applying for credit. For instance, an unemployed individual with no sources of income will not usually be approved for a home mortgage, regardless of his or her FICO score.
There are other special factors which can weigh on the FICO score.
* Any money owed because of a court judgment, tax lien, or similar carry an additional negative penalty, especially when recent.
* Having more than a certain number of consumer finance credit accounts also carries a negative weight (critics say that this causes a vicious cycle, locking people into continuing to use consumer finance companies).[citation needed]
* The number of recent credit checks also can weigh down the score, although credit agencies usually claim to allow for credit checks made within a certain window of time not to aggregate, so as to allow the consumer to shop around for rates.[citation needed]
For more information about factors that may influence your credit score read the credit rating section of the credit history page.
* 35% — punctuality of payment in the past (only includes payments later than 30 days past due)
* 30% — the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
* 15% — length of credit history
* 10% — types of credit used (installment, revolving, consumer finance)
* 10% — recent search for credit and/or amount of credit obtained recently
The above percentages provide very limited guidance in understanding a credit score. For example, the 10% of the score allocated to "types of credit used" is undefined, leaving consumers unaware what type of credit mix to pursue. "Length of credit history" is also a murky concept; it consists of multiple factors — two being the oldest account open and the average length of time an other accounts have been open. Although only 35% is attributed to punctuality, if a consumer is substantially late on numerous accounts, his score will fall far more than 35%.[citation needed] Bankruptcies, foreclosures, and judgments affect scores substantially, but are not included in the somewhat simplistic pie chart provided by Fair Isaac.
Current income and employment history do not influence the FICO score, but they are weighed when applying for credit. For instance, an unemployed individual with no sources of income will not usually be approved for a home mortgage, regardless of his or her FICO score.
There are other special factors which can weigh on the FICO score.
* Any money owed because of a court judgment, tax lien, or similar carry an additional negative penalty, especially when recent.
* Having more than a certain number of consumer finance credit accounts also carries a negative weight (critics say that this causes a vicious cycle, locking people into continuing to use consumer finance companies).[citation needed]
* The number of recent credit checks also can weigh down the score, although credit agencies usually claim to allow for credit checks made within a certain window of time not to aggregate, so as to allow the consumer to shop around for rates.[citation needed]
For more information about factors that may influence your credit score read the credit rating section of the credit history page.
#6
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Again. A 750 is not the same as a 750. If you have two people, one is a 19 year old with a $500 credit limit credit card they have had for one year and never been late on, and the other is a 750 that has been in the bureau 20 years with car history, mortgages, and high limit credit cards, do you really think they present the same credit risk?
#7
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Again. A 750 is not the same as a 750. If you have two people, one is a 19 year old with a $500 credit limit credit card they have had for one year and never been late on, and the other is a 750 that has been in the bureau 20 years with car history, mortgages, and high limit credit cards, do you really think they present the same credit risk?
Would a 19 year old with 1 credit card and one year of credit history actually have a FICO score of 750?
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#8
Again. A 750 is not the same as a 750. If you have two people, one is a 19 year old with a $500 credit limit credit card they have had for one year and never been late on, and the other is a 750 that has been in the bureau 20 years with car history, mortgages, and high limit credit cards, do you really think they present the same credit risk?
15% — length of credit history
...
"Length of credit history" is also a murky concept; it consists of multiple factors — two being the oldest account open and the average length of time an other accounts have been open.
...
"Length of credit history" is also a murky concept; it consists of multiple factors — two being the oldest account open and the average length of time an other accounts have been open.
Anyhow, this is all moot to me. At my age, I'm 25 years past worrying about FICO scores or getting credit approvals.
#9
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It is possible, yes, and that is why the overall credit file plays a role in addition to the FICO score. Some banks may go purely off FICO, but most will look at the overall file. I don't know how IFS scores their applications, but I would assume they look at the big picture.
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Thanks to everyone for great replies and information regarding credit/FICO
#11
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It is possible, yes, and that is why the overall credit file plays a role in addition to the FICO score. Some banks may go purely off FICO, but most will look at the overall file. I don't know how IFS scores their applications, but I would assume they look at the big picture.
#12
I don't have the best credit score, but I still qualified for the 1.9% financing through infiniti. My score is about 675. I think I was able to get the better financing because of my past two car loans(cosigned with mom) were paid off rapidly and I have a morgage now for the past year along with various credit cards that have very low if any balances. I think the score doesn't matter as much as your dept to income ratio. If I went out in a couple months and tried to get another $40k car I'd probably get turned down because I would have a higher dept to income ratio. My 2 cents
If you have a really good income and decent credit you may get it. Do you have a current or previous car loan you were good on. It took me to the age of 27 to now get this loan by myself.
If you have a really good income and decent credit you may get it. Do you have a current or previous car loan you were good on. It took me to the age of 27 to now get this loan by myself.
Last edited by willizm; 03-16-2008 at 06:18 PM.
#13
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I never said anything about not being able to afford the car, thats not an issue otherwise I wouldve titled the thread, "can i afford a G37?" I might have just graduated college (grad school, doctorate degree) but I have a good steady income. I was just inquiring as to this being my first time buying a car through a dealership vs private.
Thanks to everyone for great replies and information regarding credit/FICO
Thanks to everyone for great replies and information regarding credit/FICO
It seemed to me that anybody that would ask such a question might be in that situation.
Otherwise, why ask?
Just go and buy the car. Why would it matter what they check?
Shouldn't be a problem.
That was my reasoning, and once again, I apologize if I was off base.
I still maintain if you can't save (at least 10% of your income) while buying a depreciating asset, then you need to reassess what car you're going to buy.
Last edited by wireboltman; 03-16-2008 at 06:44 PM.
#14
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What part? I stated I do not know how IFS scores their applications. willizm stated that he qualified for 1.9 with about a 675 FICO. He also stated he had two well paid cars and a mortgage. Good installment history got him the rate.
#15
Arm flailing tube man
on what basis do you claim that a 19 year old with 1 credit card and 1 year of credit history would have a FICO score of 750? i've worked in car finance and never ran into a situation like that. just curious as to whether you've personally seen a situation like that.