Refinancing after a year?

[BMW_TT]

My 335i is the first major purchase. I have credit cards and a good FICO score (~750), but I don't have any major credit history. I signed my car knowing that my interest rate will be higher (~9%).

Will it be wiser to go ahead and refinance for a lower rater after a year? I know there are fees that might apply with refinancing a car. Just want to hear your opinions.

[BMW F22]

Im assuming that 9% is with BMWFS? Have you checked with Credit Unions or your local banks?

[MadDog]

Originally Posted by BMW_TT

My 335i is the first major purchase. I have credit cards and a good FICO score (~750), but I don't have any major credit history. I signed my car knowing that my interest rate will be higher (~9%).

Will it be wiser to go ahead and refinance for a lower rater after a year? I know there are fees that might apply with refinancing a car. Just want to hear your opinions.

How could you have a 750 FICO score and NOT have any "major credit history" ??

Go to a bank or credit union. Lots of them are way lower than 9%.

[BMW_TT]

Originally Posted by Kenny@JleviSW

Im assuming that 9% is with BMWFS? Have you checked with Credit Unions or your local banks?

Yes, I'm going through BMWFS. They tried to contact some lenders but I did not get approved because I do not have major credit history ie. apartments, mortgages, etc. I just turned 25 and I have a pretty good record of paying all my credit card payments on time and over the min if I carry a balance.

I have a credit card that monitors my FICO through transunion. The avg last year was at 750. I now have a credit monitoring system that I pay through Amex and my last month's score was 737.

My plan is to stick it through for the first year and then refinance through a credit union.

[phantom330]

Originally Posted by BMW_TT

Yes, I'm going through BMWFS. They tried to contact some lenders but I did not get approved because I do not have major credit history ie. apartments, mortgages, etc. I just turned 25 and I have a pretty good record of paying all my credit card payments on time and over the min if I carry a balance.

I have a credit card that monitors my FICO through transunion. The avg last year was at 750. I now have a credit monitoring system that I pay through Amex and my last month's score was 737.

My plan is to stick it through for the first year and then refinance through a credit union.

you can also refinance your loan directly with FS you know. If your credit score is 700+ your rate is going to be better than 9% if you're approved. No cost either.

[BMW_TT]

Originally Posted by phantom330

you can also refinance your loan directly with FS you know. If your credit score is 700+ your rate is going to be better than 9% if you're approved. No cost either.

Damn, so basically I got dicked?

[phantom330]

Originally Posted by BMW_TT

Damn, so basically I got dicked?

No, rates change, but when you do a refinance you're going direct with the finance company so there is no middle man to mark up your rate. If you haven't been in your loan very long they may not want to approve you on a refi quite yet. Give them a call and find out, they have a whole refinance department that can give you quotes and let you know what rate you would get rather quickly.

[UncleWede]

Tell BMWFS that you are looking at alternatives, but want to give them first shot at the deal

[BMW_TT]

Originally Posted by UncleWede

Tell BMWFS that you are looking at alternatives, but want to give them first shot at the deal

I might do this after the new years.

[TurboFan]

Originally Posted by BMW_TT

Damn, so basically I got dicked?

Sounds to me like the dealer marked up the loan pretty drastically.

[phantom330]

Originally Posted by BMW_TT

I might do this after the new years.

doing that really won't make a difference. Somebody is just going to quote you payments and submit them to a credit analyst for approval. They won't know/care if you're looking elsewhere to be honest.

[d3l0n]

i'm sorta in the same boat.

[Couch]

Did you not check with other banks or CU's before hand?

I went with a CU, but BMW was only 3/4 of a percentage point behind what I got form the union.

[Spool]

750? Dude like 2% of the people in the U.S have scores this high. I bet you are looking at your Transunion score or something cuz Equifax ur probably a high 600's. And equifax is what the lenders look at when they finance ur car.


I have been building my credit for 10 years and when i checked my scores, transunion and it read 788, got my actual score from equifax and it was like 720 or some shit.

[AoshichanX]

I am @ 740. I think it's possible for young people with good credit if your parents help you out when you are 15/16, putting your name on the credit cards and start building your credit from there.

[TurboFan]

don't confuse credit score with the ability to repay the loan. Banks / lenders look at many factors, and many are figuring out that credit scores don't mean shit anymore. You can have a 750 and make $20k/year. A lender can pull your credit report, look at your score, see the short history, and decide you are too unreliabel, so they jack up the rate to cover any perceived risk.

FairIsac is re-working the FICO calculation, and releasing it as FICO 08. They've quietly acknowledged that there are serious shortcomings with basing credit on FICO scores alone.

[phantom330]

Originally Posted by TurboFan

don't confuse credit score with the ability to repay the loan. Banks / lenders look at many factors, and many are figuring out that credit scores don't mean shit anymore. You can have a 750 and make $20k/year. A lender can pull your credit report, look at your score, see the short history, and decide you are too unreliabel, so they jack up the rate to cover any perceived risk.

FairIsac is re-working the FICO calculation, and releasing it as FICO 08. They've quietly acknowledged that there are serious shortcomings with basing credit on FICO scores alone.

you're 100% correct. You can have an 800 and only have a credit card with a 1k limit on it. Score means very little when decisioning an application for most lenders, however it can effect the actual interest rate you get.

[Revlis]

Originally Posted by Spool

750? Dude like 2% of the people in the U.S have scores this high. I bet you are looking at your Transunion score or something cuz Equifax ur probably a high 600's. And equifax is what the lenders look at when they finance ur car.


I have been building my credit for 10 years and when i checked my scores, transunion and it read 788, got my actual score from equifax and it was like 720 or some shit.

2% doesn't make any sense, almost all of your advertised Lease and finance rates use Tier 1 credit IE 720+, to establish their promo rates. Tier One Probably encompasses far more than 2% or we just get a lot of folks in the dealership from that 2%.

FWIW 700-720 is right in the middle of the road. FICO Runs from 300-850 and roughly half of Americans have a 700 or better, nothing to brag about.

750+ is pretty damn good and you'll actually qualify for the best rates assuming you have the income to match, about 20% of American score 750 or above however, so maybe you meant 20%. A FICO of 800 plus is hard to maintain to there is still a good number of folks out there with 800s.

Besides, with folks working out how to tweak their credit scores, and basically falsifying their own credit scores, FICO is meaning less and less.

[TurboFan]

Originally Posted by phantom330

you're 100% correct. You can have an 800 and only have a credit card with a 1k limit on it. Score means very little when decisioning an application for most lenders, however it can effect the actual interest rate you get.

While I agree that you need a high score to get a good rate, a high score will not ensure a low APR. Most creditors these days look at your total picture, including your debt to income ratio to determine an interest rate.

Originally Posted by Revlis

2% doesn't make any sense, almost all of your advertised Lease and finance rates use Tier 1 credit IE 720+, to establish their promo rates. Tier One Probably encompasses far more than 2% or we just get a lot of folks in the dealership from that 2%.

FWIW 700-720 is right in the middle of the road. FICO Runs from 300-850 and roughly half of Americans have a 700 or better, nothing to brag about.

750+ is pretty damn good and you'll actually qualify for the best rates assuming you have the income to match, about 20% of American score 750 or above however, so maybe you meant 20%. A FICO of 800 plus is hard to maintain to there is still a good number of folks out there with 800s.

Besides, with folks working out how to tweak their credit scores, and basically falsifying their own credit scores, FICO is meaning less and less.

Per BusinessWeek this week, mean FICO in this country is 723.

[phantom330]

Originally Posted by TurboFan

While I agree that you need a high score to get a good rate, a high score will not ensure a low APR. Most creditors these days look at your total picture, including your debt to income ratio to determine an interest rate.




Per BusinessWeek this week, mean FICO in this country is 723.

I said it may effect the score. For example BMW tiers loans based directly off credit score. If somebody gets approved and they have a 750, no matter how much or little credit they have, they get the Elite rate. I'm sure mortgage lending and lines of credit work much differently.