Another question that we regularily get is: How many times can we check our credit without affecting the score?

Although it’s true that your credit score may fall slightly (2-3 pts) following some types of credit checks, experts and credit bureaus all say that when you shop around for auto, student or mortgage loans during a short time frame, it results in a single inquiry. If you have good credit, multiple inquiries may have zero effect on your score. Credit cards are a different story but we are primarily talking about auto loans and getting pre-approved for auto financing here.

To prevent credit score damage due to multiple hard inquiries over a short time period, scoring models recognize that borrowers often shop around for the best loan. We call it “Smart people Shop” so why would you get a lower score for being smart? You don’t! “Looking for a mortgage, auto or student loan may cause multiple lenders to request your credit report, even though you are only looking for one loan,” FICO’s consumer information advisor explains. For purposes of calculating the credit score, “inquiries for mortgage lending and auto finance (new, used & refinance) purposes within a given period of time, generally 14 days, are counted by credit scoring systems as a single inquiry,” says the director of public education for credit bureau Experian. We have heard this ourselves, directly from each of the credit bureaus and have posted this fact in our FAQ’s and on our website. “There is no limit to the number of inquiries for those purposes,” he says.

While auto, mortgage and student loan applications over a brief period are treated as a single inquiry, that isn’t the case for credit cards. For consumers, “this means that each additional credit card inquiry can potentially hurt your score — although by less than 5 points each in most cases,” says the consumer operations manager for myFICO .Com. “For this reason, randomly applying for credit cards is not a good idea. Instead, when credit card shopping, consumers should first do their homework by comparing rates, terms and features being offered by lenders, and then only apply for the cards that best meet their needs.”

Still, it’s unlikely that credit checks will prevent you from borrowing. “Inquiries alone will never be the reason an application is declined,” he says. That means as long as your credit report shows a record of on-time payments, you don’t need to worry much about having your credit checked from time to time.

Auto Refinancing

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 will need to get 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 of the most important is your payment history.   Any late payments or missed payments you have had will certainly have an effect on your rating and thus your credit score.  Also, all of your credit card balances are taken into consideration whenever loans are being estimated.  There are a few other things as well that are taken used in determining whether or not you can obtain any auto loan, like checking and saving accounts and any personal loans or any mortgage payments.

One good reason why having a good history of credit is so important is that it will certainly determine any eligibility you have for a car loan.  This can also have an effect on the interest rate you will be charges to secure your loan.   Your ability to pay off the car loan is evaluated along with any money that you may have borrowed and now need to pay back.

Any loan interest rate will be dependent upon your history of your credit.  Interest rates are lower for the people who have a good history of credit.  In most cases, people 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, they use a credit report.  Then according to your credit score, the dealer will make a lending decision and interest rate based on your score.  They usually mark up the interest rate so consider using a direct lender and finance outside of the car buying efforts.  The thing to remember is that all dealerships will charge you a higher rate  of interest on any auto loan.

The credit rating that you have will make all the difference in whether you can be approved for your auto loan and what the interest rate will be.  It may be worthwhile to check out car buying tips to help save you the most cash or tips to improve your credit.  It is highly recommended that you try to keep any credit you have in good condition by paying your bills on time.  The score of any credit report will always be the deciding factor in determining your eligibility for a car loan and the rate that you will pay.

Tips and Tools:
Car Buying Tips  

Auto Loan Calculator

Tips to Improve Your Credit

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Look for a lending site that will help you find someone to finance your used car.  These lenders probably have multiple lending partners with most lenders being well known financial institutions.  You will not get as many lenders begging to give you a loan, because your low credit rating means that you are viewed as a risk, but you will be able to find something.  Getting two offers is better than arguing with a F&I guy at the dealership.    Sometimes you have to take what you can get so that you can get yourself out of your jam and rebuild.  Here is a good source to improve your credit.   Tips to Improve Your Credit

Finding auto loans for used cars can be a crazy and unpleseant experience.  There are many websites out there that are willing to sell your information the moment that you type it in.  It is important to use a trusted website when comparing rates for lenders when buying a used car. There are only a very few websites that are a great resource to help you find the best deal possible when buying a used car.  Most are lead buying sites that sell off your information to a lead generation network.  Anytime you see a site that says “100% Approved” or “98% funded”, it should raise the hair on the back of your neck.  Don’t be fooled.  Legitimate sites have their address on them so that you know where they are originating – others are coming out of China, India, Pakistan and Europe. 

These sites look real but frankly, you get the short end when you apply.  With most lending sites, you will get one loan offer or a decline.  There is one site, myAutoloan.com,  that get’s you up to four loan offers and lets you choose which one is best for you.  It’s really pretty cool to get even two auto loan offers since all you have to do is pick the cheapest one!   These are direct loans so there is no markups – look closely, as you can tell which sites are real and others that are simply to good to be true.  (They aren’t) By comparative shopping for an online auto loan Lender, borrowers can save thousands of dollars over the course of the loan, don’t have to deal with the finance game at the dealership and become both empowered and “like a cash buyer”.  By using the internet you can save yourself thousands of dollars on your next used car purchase!

Tips and Tools:
Car Buying Tips
Auto Loan Calculator

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

So what does one do if they want to improve their credit score?  There is no doubt that the effort to raise your score is a very difficult one.  Fortunately, there are a number of reputable companies out there to help you if you choose.  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. Their intent should be to learn about your situation, in order to best identify how they can work with you to improve your credit. These days, credit is important for securing your next mortgage, auto loan or credit card. We also know that some employers are running credit checks for new employment opportunities and simple consumer accounts must have a background credit check. This is why it is so important to take control of your personal credit score.

Improving Your Credit Scores

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 a house or buy a car 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.  Many auto insurers, for example, use credit scores to set premium prices, and a growing number of employers factor them into their hiring decisions as we mentioned before.

While the calculations and methodology behind FICO scores is extremely complex, there 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. 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.

3. 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.

4. 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.

5. 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.

6. 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. 

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