Category Archives: Credit & Auto Loans

The Rules for a Credit Report have been Expanded

As we all know, the more you know about your credit, the better position you will be in when you actually need it.  Staying informed is not that difficult and it can result in substantial savings when you borrow, if you know where you stand.

As of January 2011, new federal rules were initiated where creditors must notify consumers when their credit report has been used to provide them credit on less-favorable terms than other consumers.  These are what they call “risk-based pricing” rules under the Fair and Accurate Credit Transactions Act of 2003.  Risk-based pricing occurs when a lender offers a different interest rate and different loan terms based upon their credit history and creditworthiness.  That means that if you have been notified, you can obtain a copy of your credit report for FREE.  This way you can immediately review your credit report for accuracy – important because things do happen that create an error reporting situation.

Here is a new twist – instead of providing the risk-based pricing notices, a creditor may decide to provide you, when you apply for credit, (such as an auto loan or an auto refinance loan), with a free credit score and information about that score.  This expands the existing requirement that mortgage lenders must give consumers the credit scores they used in whether or not they decided to grant you a loan.  Right now there is a credit score disclosure requirement in FACTA, but it will only apply when you are trying to finance a home.  Under final rules issued in 2009 by the Federal Reserve Board and FTC, credit card issuers and other lenders must tell you when they’ve been granted credit on worse terms than other consumers, based on their credit report or on a credit score.

With risk-based pricing, if a lender came back and offered you less favorable terms for an auto loan because of your lower credit score, you were not provided a notice of that.  It was not considered an adverse action of you accepted their offer.  Now if you get credit granted on less favorable terms, and they are using risk based pricing, they will have to tell you that you are getting a higher interest rate because of your credit history.  So, let’s face it, awareness is important when it come to your credit and now you will know when you are getting a higher price as a result of your credit score and your credit history.  That’s the first step in getting you to correct it and improve it so that you save money when you need to apply for credit.

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Tips to Improve Your Credit

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How To Buy Your Auto Lease Out and Own the Car

An auto lease can be a great deal.  By leasing a vehicle, you can gain access to a brand new high quality car to use on a regular basis without paying a large sum of money out of your pocket.  Some people even like the vehicles they lease enough to purchase them before the lease expires or at the end of their lease term.  If you are interested in purchasing the vehicle you are leasing, you should look into an auto lease buyout loan online to make the entire process as simple and as fast as it can possibly be.

By using online resources to get the lease buyout loan you need for your purchase of an auto lease buyout, you can easily access the capital you need in just a matter of minutes.  There are many sites you can utilize for this process, but there are some sites that are better than others in this industry.

The best sites you can use are businesses that let you compare multiple offerings from different lenders.  Look for things on the website that say, “up to 4 lenders” as an example.  These businesses can help you find the very best rates and the best overall deals available at any given moment.

Your first step should be the step of finding one of these businesses that let you compare multiple lenders at one time.  Once you have found one of these businesses online, you are ready to start the application process.

The application process is very simple too.  Simply create your account, then enter some basic information about yourself and enter the type of loan you would like to acquire to complete the application.  As we have been discussing, Auto Lease Buyout is what you are looking for.  Once you click submit, you will be given multiple offers to review.

Now that you know how to get an auto lease buyout loan online, you can see that the process of buying your leased vehicle could not be easier.  Once you have decided that you would like to buy your car, you should go to a site that lets you compare multiple offers at one time.  By using these sites, you can be certain that you are getting the best deal available to you right now.
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How Your Credit Score Affects Your Car Loan Rate

 

If you are thinking about purchasing a car, you will need to find out about your own credit score as this can have an effect on the out come of obtaining an auto loan. Since you already know you will need some funds to buy an automobile, you need auto financing and you will want to know just how your credit score affects your car loan rate.

Your score can consist of several factors and one is the payment history you have had, and just how any late payments or missed payments you may have had, will certainly have an affect on the rating of credit. Also all of the credit card balances too are taken into consideration whenever loans are determined. There are a few other things as well that are taken into determining whether or not you can obtain any auto loan, like checking and saving accounts and also any personal loans and/or any mortgage payments too.

One good reason why having a good history of credit is so important is that it will certainly determine any eligibility you shall have for a car loan. This can also have an effect on the interest rate as well towards any money that you may have borrowed and need to pay back.

In regard to your score, any loan interest rate will no doubt have a lot to do with the history of your credit. Interest rates are available for the people who that have a good history of credit. And in most cases even the ones who have an average or a low credit rating will need to pay a higher car loan rate towards the interest on a loan.

Whenever you go and apply for auto loans with any dealership, a credit report shall be looked at and then according to the report of your credit score, the dealer will make a consultation and from there along with this score, will then determine what interest rate it is that you may need to be paying. Also one other important thing to remember is that all dealerships will charge you higher rates in regard to the rate of interest on any auto loan.

The credit rating that you have will make all the difference in whether you can be approved of obtaining your loan and what the interest rate will be and also whether or not you will even get an auto loan.  It may be worthwhile to check out car buying tips to help save you the most cash or tips to improve your credit.  So it is highly recommended that you try to keep any credit you have in good condition. The score of any credit will always be the deciding factor in determining your eligibility for a car loan.

Other helpful tools:  auto loan calculator, Free Auto Buying Guide

Factors That Influence Auto Loan Interest Rates

When applying for any type of car loan, there are all sorts of different factors that will affect the interest rates on it.  So what exactly are the main factors that influence auto loan interest rates?

Well, your credit rating will be extremely important.  If you have demonstrated a poor financial background then this will show on your credit report and you will be seen as more of a risk from any auto lender.  As a result, the car loan interest rates that you have to pay will always be higher.  A good credit rating will help you to achieve much more affordable and competitive auto loan interest rates.

The year of the vehicle is also important.  In general used cars loans will have higher interest rates than new cars.  Essentially, auto loans are secured loans with the vehicle as collateral, and as such the older the car is, the higher the interest rates on it are likely to be.

The length of the auto loan is certainly important as well, and interest rates can vary significantly depending upon how long the auto loan is taken out for.  In general, the longer the loan is, the higher the interest rate will be, and therefore many people choose to take a shorter term car loan if financially viable.

The amount financed is another factor that will influence the interest rates on your car loan.  Most lenders will have a minimum amount to finance guideline, usually no lower than $5000.  If any auto loan is below this amount they will have trouble trying to make any money off it, and if they were to approve a loan amount under their minimum it would usually have the highest possible interest rates attached to it.

Finally, state guidelines will also play a part in any car loan that you want.  Many states have maximum cap rules which will prevent them from charging any auto loan rate they would like.

Need more info? Check out “Car Buying Tips

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Tips to Improve Your Credit

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Credit Score Tips

There is one question that we get asked, again and again.  “How do I improve my credit score?”  It’s not something that gets taught in school and it’s sort of assumed that everyone just “knows” how the whole credit scoring thing works – but we all know that’s not the case.  So let’s take a quick look at some key points.

Each person who utilizes credit, from credit cards to auto loans, has three standard credit scores, as a person’s creditworthiness is tallied separately by the three major credit reporting agencies.  The scores – known as FICO scores, for Fair Isaac Corporation, the company that developed and pioneered credit scoring about 50 years ago, range from 300 to 850.  The most current national average suggests that the national median score is about 675.

So what does one do if they want to improve their credit score?  Let’s say you would like to consider an auto refinance  loan but think you need a higher credit score to do so.

There is no doubt that the effort to raise your score is a very difficult one.  Consider working with a credit repair company to assist you.  What you need is to find the right solution for you, as every situation is different.  If you work with an outside company, you need to make sure that your consultant will provide a private and confidential review of your current financial situation. These days, credit is important for securing your next mortgage, auto loan or credit card. This is why it is so important to take control of your personal credit score.

Getting a Higher Credit Score

Improving your credit is not only worthwhile, it a smart thing to do.  A common misconception is that getting more credit means that you are more credit worthy.  That is completely incorrect because that’s not what happens.  For example, throughout the year, many retailers and credit card companies often offer you the chance to save 10-20% or more on purchases by opening a credit card account.  If you are also looking to purchase buy a car or trying to get a car refinance loan during that time, you might want to stop and think twice about signing up.

Why?  Because by opening several credit lines in quick succession can actually lower your credit score.  This score is used by every company or business that provides credit from car dealerships to mortgage lenders and they calculate just how likely you are to repay your debts. You need to know that lower scores mean you may be charged higher interest rates on auto loans and other types of borrowing.  They can also affect you in less obvious ways.  Here are a few key principles that you can follow to raise your credit score.

1. Basically the most important way to improve credit scores is also the least complicated.  Pay your bills in full and on time.  Your overall history of making payment on your current bills accounts for about 35% of the FICO score.  Missing credit card payments or submitting the minimum due each month will immediately lower scores, as will any debt collections or bankruptcy filings that show up on your credit report.  The only good news here is that credit scores reflect your most recent activity, so major negatives like collections will eventually mean less and less, even if it take years to work their way off your credit report.

2. Build up an active and lengthy credit history.  This means it’s usually better not to close out all of those old credit cards – unless new ones are replacing them – because keeping them open builds your credit history.  This makes up about 15% of the FICO score.  Keep a few dormant accounts active.  This will help lower the balance to limit percentage since limits are factored into the credit utilization formula.

3. Don’t open new accounts within 60 days of making a major purchase.  This results in about 10% of your score.  Taking out new credit lines raises red flags because it makes you look riskier.  This is why it’s best to avoid all those retail cards during the holidays – unless of course, a temporary decline in your credit score is no big deal.  Just be smart and think twice about your future purchases and what looks likely to take place over the next few months.

4. Maxing or topping out your credit cards will drop your score like a rock.   Even using 50% or more of your limit can cause problems because it increases the risk that you may not be able to repay.  For anyone looking to boost their score the key is to maintain a low “credit utilization” level.  This refers to the percentage of available credit that you have on each of your credit cards.  The credit utilization level falls under a complex category known as “amounts owed.” This makes up 30% of the FICO score.  If you have five credit cards with a $5,000 credit line each, for example, it’s not wise to carry a balance of more than $2,000 per card.  It’s better to carry smaller balances on several cards than to pile everything onto one card.

5. Get a copy of your credit report and make sure your credit report is accurate.  This is very important.  Since credit scores are based on credit reports, it’s very important to make sure the information in your reports are fee of errors and fraud.  Federal law gives you the right to get a free report from each of the major credit bureaus once per year.

6. Have a wide variety of credit experiences and loans, over time.  This is called diversification and means that you have had and get credit for having a variety of loans, so it’s better to have an assortment, including installment plans like auto loans or mortgages rather than simply credit cards.

Want some help to improve your credit score?  Fast, efficient and effective help is just a click away – Improve My FICO Score