Turned Down for Cap One Auto Loan

[x2ski]

Hi All,

I hope this is the right place to post this but, if not, mods feel free to move.

Anyway, I applied for one of those "Blank Check" car loans from Capital One on Thursday and was approved; however, before I even requested the Blank Check, I wanted to make sure everything was in order, so I completed and faxed everything that was requested: 2 references, copy of driver's license and last 2 years' federal tax returns (self-employed poker player)

Today I received an e-mail asking me to call them because they had a few questions, so I called them with my 2005 and 2006 tax returns in front of me, ready to battle.

I was thrown off by why they decided to "withdraw" their offer. I thought it would be because a significant portion of my income is from poker and the rest from investments... Nope.

In 2005, I was still in the real estate business for the first few months of the year. I didn't make any sales, yet filed a Schedule C showing a total loss of ~$800 (various expenses). I made $61,000 from poker that year, and an additional $25k from investments. I didn't file a Schedule C for poker, but did the standard total wins on 1040 less itemized deductions on Sched A thing since it saved me $3,000 (self-employment tax and whatnot... for 2006 I did a Schedule C).

Anyway, according to Cap One, since I am self-employed, I technically lost $800 in 2005, and all other income is irrelevant. It's no big deal, since I don't NEED a car... I just wanted to trade in one of our honkin' SUVs for a more economical (fuel-wise lol) sedan.

However, my concern is this - The wife and I plan on looking for a house this fall. Is what Cap One did standard, or are we screwed for loans this year? (2007 - need 2 years' tax returns, so 2008 should be okay with '06/'07 returns)

I figure I can always amend 2005 and file a Schedule C for poker. I even suggested that to the Cap One dudes and they seemed all for it, but I don't want to shell out another $3,000 plus penalties right now just to get a new (used) car. If I must amend 2005 for a house, I will, but I wanted to run it by you guys first.

Thanks for any advice.

[BradleyT]

I filled out the cap one auto loan form and don't remember including any income information. They sent me a $20,000 check a few days later. Luckily Toyota was able to beat Capital Ones rate by 2.5% so I went with them and ripped the auto loan check up.

So my advice is to try the dealership for a loan.

[BvlyHls90210]

You haven't given enough info IMO for others to evaluate. For example, what is your credit history like? It just doesn't make sense they would deny you based on your 2005 circumstances. If that was 2006, maybe, but it seems strange 2005 would penalize you like that.

[x2ski]

[ QUOTE ]
You haven't given enough info IMO for others to evaluate. For example, what is your credit history like? It just doesn't make sense they would deny you based on your 2005 circumstances. If that was 2006, maybe, but it seems strange 2005 would penalize you like that.

[/ QUOTE ]

My credit history is "lazy". I don't pay bills on time, not because I don't have the money, but because I forget. I've been doing this since college and I know it is a terrible TERRIBLE habit.

As a result, I have 2 or 3 "30 days past due" on my credit report(s), with an overall average score around 600 (bad, i know). I'm hoping the low score is mainly due to having most of my credit cards almost maxed out. I plan on paying them all off within the month, so hopefully the score will bump up a bit.

It was a 704 about 2 years ago, but that's when I didn't really have any balances on my cards. Then, a little emergency (not poker-related [promise]) about 1 1/2 years ago caused me to use them. They haven't been touched since, but the balances have been ever so slowly going down because I haven't focused on them. Now it's just time to hammer out the hands and pay them off.

I don't know what information Cap One looked at (if any), before they approved me online. But I was approved until they saw my tax returns... 2005 was all they were concerned with, as far as I could tell.

[x2ski]

bump

Also, if I amend my 2005 return, can I immediately fax it to Cap One and mail it to the IRS at the same time, or do I have to wait for some type of confirmation from the IRS?

In other words, does Cap One or any other lender verify my submission with what the gov't has on file, or do the go with what I send them and hope that it's accurate?

[Statutory]

I'm confuse how you have 25k in investment income combined with CC Debt and trying to get car loans.

Shouldnt you shift some of those investments over to pay off debts?

[x2ski]

[ QUOTE ]
I'm confuse how you have 25k in investment income combined with CC Debt and trying to get car loans.

Shouldnt you shift some of those investments over to pay off debts?

[/ QUOTE ]

I would, but I'm not the custodian.

Let's just leave it at that.

[vilemerchant]

Auto loans are just stupid. You know you actually have to pay interest on those right? Just get a heap of credit cards going and use those to buy the car, then keep transferring balances to cards that have 0% balance transfer offers, whenever the 0% period runs out, flip to another card. If you do it right you'll never pay a cent in interest.

[AggroFish]

Screw cap1, just go down to the dealer on a weekend when all the underwriters are gone, and drive away in your new car.

As far as the home loan you're going to want two years in the same line of work with verifiable income...doesnt matter where it's coming from. You can do one of two things:

1.) get into the home with the subprime loan you'll qualify for and make ALL ontime payments which will improve your scores/credit history.
2.) Improve your credit and wait.

Either way, you probably want to make a few big payments to your credit cards and get the balances below 50%. Depending on your other obligations you may have to go stated income in whice case you're going to need to bring your scores up.