Minimum credit score for Toyota financing?

[stream]

Originally Posted by Jabber

One other reason we run your bureau is because that is how we are able to get the OFAC report. That is a federal law now that we have to make sure you aren't on a terrorist watch list.

My dealer also mentioned this--saying that even if I paid cash, they'd need my social security number to meet that requirement.

[TomInOregon]

Originally Posted by Jabber

First off, as a previous finance manager for dealerships for the last 16 years (off and on), I'll dispell a few myths:

1) Your score does get affected when your bureau is run, but it is graduated scale based on the number of inquiries and the time between them. If you have 10 inquiries in 10 days, your score will drop more than 10 in 60 days. Mortgages do not have this problem. Car dealerships have been trying for years to get the same exemption, but nothing yet. Be careful when buying a car. Once you sign that credit application, the dealer can legally send you to 10 banks if he wanted to. Doesn't happen often, but I have personally seen it. Shady dealers will do this to prevent you from buying somewhere else. The more inquiries, the lower the score. If you started off low, it may drop you far enough to be un-financable.

2) Currently, there is no minimum score requirement. Many factors are involved such as new/used, money down, term, why is your score low? Is it because you have high credit card balances or because you have 2 repossessions? (not you personally OP!)

Along the same lines, Toyota has 9 different tiers to their credit system. Toyota only uses your bureau score to determine rate once they establish credit worthiness seperately.

3) Always check with your credit union first. It will keep the selling dealer honest about the rate.

4) Again, to the OP. You can only use one "cash for clunkers" rebate per household. And you have to purchase a new vehicle. You mentioned a Gen 2, so I think you might be looking at a used one.

Thanks, Jabber. That's good information. I'm still learning some of the fine points of credit scoring.

[Jabber]

Originally Posted by TomInOregon

I'm actually looking at a Gen 3 (2010) Prius II. It will be a new car and we are planning one "cash for clunker" (1988 Chevy Silverado 10-12 actual MPG vs. EPA 14 MPG) coupled with a traditional trade-in of a 2000 Nissan Altima. I should get $4500 for the truck combined with ~$3500 for the Altima (dealer prices locally are typically ~$5,000+). The Prius should come in ~$24,000 w/TTL. The numbers, of course, may all change. At the rate things are going, all of the "cash for clunkers" money may be gone by the time all of the rules are rolled out on July 24th. Hyundai's been taking trades for a while now and other individual dealers for other makes are starting to follow suit.

We have been taking deposits in anticipation of the roll out date. I bet we already have 5-6 cars sold based on what we know as of this point.

[Jabber]

Originally Posted by TomInOregon

Thanks, Jabber. That's good information. I'm still learning some of the fine points of credit scoring.

The scoring system is actually very flawed fundamentally. I consider myself to be an expert on how they calculate the score based on years of reading them, courses (when I was doing mortgages for a short time), and a friend that works for Transunion. It WAY too complicated to explain everything in detail, but suffice to say, what most people like to do is actually hurting your score. One of the tips I have (some people know, but most aren't aware):

DO NOT CONSOLIDATE YOUR CREDIT CARDS TO ONE CARD AND THEN CLOSE ALL THE OTHERS!

Not only will you hurt your score by moving all the money to one card (lessening the buying power you have, or credit available), but by closing them you do further damage. I actually heard one of the "experts" on CNN, HLN, one of those stations, tell a caller to do this. Beyond a shadow of a doubt, you will drop your score by 40-50 points by doing that.

Here is how the bureau "translates" the info:

You have 4 cards with limits of $7,000, $3,000, $10,000, and $1,000. Total of $21,000 in available credit.
On those cars, you have balances of $3,000, $1,000, $6,000 and $0, respectively.

Here is how the bureaus calculate the score.. Card A has more than 50% available, you get plus points. Same thing with card B. Card C ($10,000 limit) has less than 50%, but more than 70%, you get a small deduction in points. Card D is more than 50% available (no extra points for having no balance). Then it looks at your totals.. $21,000 limit, $10,000 balance... more than 50%... you get more bonus points.

Now, in the mail, Card C sends a letter for you to transfer your balances over at 0% for 1 year... sounds great! But, the minute you transfer all the money over, you have just maxed out that card. So now you get hit hard for a maxed out card. But, you get plus points for the other 3. The minute you close them you are done. Because now you have a maxed a single card in your name with a $10,000 limit and a balance of $10,000. If makes no difference that you transfered the money over to lessen your overall debt. It makes no difference that it is still the same amount as before, just all together now. The bureau's formula only looks at history where payments made on time are concerned. It doesn't care about anything else, or even look at it for that matter. The only other thing that it looks at is how long the account has been open. So when you realize your mistake about closing out the other cards, and apply for new ones, the bureau sees 3 brand new cards on your report. But, it still sees the fact that you have a maxed out card. It "thinks" that you applied for the cards to max those out too. Therefore, it will give you negative points for that.

Now, eventually, as the new cards stay on your account for a year, and the balance drops on the $10,000 limit, your score will go up. But if you had to buy something on credit in between then, you undoubtably paid more in interest than you should have.. all because of a little three digit number.

Sorry for being so long on this post, but I have seen too many people make that mistake and don't understand why it happened to them.

[jim256]

Originally Posted by Jabber

Here is how the bureau "translates" the info:

You have 4 cards with limits of $7,000, $3,000, $10,000, and $1,000. Total of $21,000 in available credit.
On those cars, you have balances of $3,000, $1,000, $6,000 and $0, respectively.

Here is how the bureaus calculate the score.. Card A has more than 50% available, you get plus points. Same thing with card B. Card C ($10,000 limit) has less than 50%, but more than 70%, you get a small deduction in points. Card D is more than 50% available (no extra points for having no balance). Then it looks at your totals.. $21,000 limit, $10,000 balance... more than 50%... you get more bonus points.

It can even be worse than that--let's say your credit limit is $20k but you have never had a balance more than $3k. You have good credit, live responsibly, and don't want to max out your card. Banks and lenders may report high credit, rather than necessarily reporting the limit since that is subjective. So--your balance is now $2k, however the "points czar" concludes you are using 66% of your credit card (the $3k one time high) and thus you lose points versus someone who is at $4k but had been as high as $8k at one time (maybe even OVER their limit!)--they are now only at 50% but in reality may be worse off than you! A good credit evaluator needs to look at more than the score.

Jim (was a banker in credit card when credit scoring was first introduced)

[Jabber]

I agree. If the lender doesn't send the limit info to the three bureaus, it looks at the highest amount you have had on the card up to that point. One of the two is always reported.

Good point Jim. You also said:

A good credit evaluator needs to look at more than the score.

That is also very true. It is easy to look at something and evaluate it using common sense. That is how I always got "shaky" deals done when I was specializing in bad credit customers. Just explain why the score is so low, and have a good story to back it up. However, due to legal issues, most if not all, banks use the score to determine your rate. That is in no small part due to the Chrysler lawsuit where a zip code was determining your rate (and how dumb is that...)

[fred garvin]

Originally Posted by Jabber

One other reason we run your bureau is because that is how we are able to get the OFAC report. That is a federal law now that we have to make sure you aren't on a terrorist watch list.

what - terrorists can't be green too?

but seriously, if somebody shows up on the list do you call somebody or just tell them they can't buy the car, even for cash?

[HTMLSpinnr]

Originally Posted by Jabber

One other reason we run your bureau is because that is how we are able to get the OFAC report. That is a federal law now that we have to make sure you aren't on a terrorist watch list.

I paid cash and I never once provided my SSN or a credit app. My dealer only required what they called a "5 liner" w/ name and address info. While one could surely derive this from say, a driver's license number, I don't believe my credit was run once for the entire transaction. That being said, there's a chance that because of the nature of my deal, this could have been an exception.

[DaveinOlyWA]

well i consolidated my credit cards so now i only have 2...well didnt really consolidate... since i never carry a balance... just closed a few. but it did reduce my available credit by $14,000. now i only have two. a Visa and an Amex. maybe that is why Toyota would not finance me.

but i guess its all moot now

[dc202]

Originally Posted by fred garvin

i did my IV with cash because the return on CDs and at banks like ING and HSBC is low now and the interest is relatively higher. But that's not the point.

My point is - when you pay cash, they still run your TRW (i know its experian, but i worked for TRW when they sold the credit business so i like calling it TRW). They run it as one way to see if they should hand over the $30K car in return for a signature and a personal check.

I know this because my triplealert.com emailed me that they looked at me.

Don't know about where you live but if you produce a cashier's check from a local bank or CU around here, the dealer does not have to run your credit and I always insist that they do not. No reason to do so if the funds are verifiable.