The process was smooth and I have been driving the car for over a week now. Today received a letter from volvo financial stating that they denied my application due to excessive payment to income ratio.
First, wtf? I make 90k, my rent is $1k a month and i share other expenses with GF.
My credit score is 858 with over 10 year history and absolutely no negative remarks.
Two, the dealer is closed as its after 8pm, but wtf do i do now? Do i have to return the car
UPDATE:
I think I am good. I was able to get my account number through automated system and registered / login to the volvo financial. I see the payoff / payment amount listed so everything seems fine. Going to call dealer tomorrow just in case
From the sounds of it you might have to return the car, or see if they require a down payment to reduce the risk.
What about your debt to income ratio? Maybe if you take a look at all of your expenses including the debt and monthly expenses, it’ll help you understand better.
Also, when you call the bank, ask if you can add a co-signer and perhaps add your gf.
Sorry. Nobody here is VCFS, but it sounds like your DTI is too high, credit score or not (score is only one element of the decision, as you learned).
If VCFS won’t hang that lease, and you aren’t going to write a check or finance, then yes you might need to return the car. Talk to the dealership tomorrow and let us know.
Honestly, never knew you can have a 858 credit score and really high DTI (that your score could actually sustain that high score )
Usually with a high DTI, it tanks immediately.
Whats on your credit report that your debt is so high? You said you’re renting at $1k a month so something else must be on there that’s really causing it to tank. Only 1 card and it’s maxed out kind of thing?
Finally , why wasn’t this caught/flagged when they ran your credit ?
Just pulled my experian and my total debt is $13k of which 5k is remaining payments on my jeep which the dealer bought out from chrystler capital…weird
Student loans (federal) can really screw with DTI while not really affecting score. Since the actual payment doesn’t show on your report banks usually calculate the monthly payment as 1% of the balance. I had to submit documentation for mortgage/refinance as the difference between actual payment and calculated payment reduced my DTI by ~25%. I’ve had to submit this same documentation to get Tier 1 approval for a lease last year, but never for my other 7 leases.
Edit: this is not likely OP’s case as his student loan balance is pocket change compared to what I owe
Yeah, i generally keep the use pretty low as I have been building my credit score for years and I am very conscious of not going over 20% usage mark. To answer your question most of my credit cards range form 5 to 30k of available credit.
What’s your DTI? I make $250k salary (quite a bit more in bonuses and stock), but debt is over $100k/yr mortgage, and this worries me as I am about to get a volvo.
100k/yr mortgage sounds ridiculous but only because I’ve never thought about it as a yearly payment. I’m upset you just made me do that. I have a similar DTI to the numbers you posted and picked up a Volvo a few days ago. No problem with credit. Although maybe I should wait a few more days for something in the mail
