You Control Your Credit Score!
If bad credit is standing between you and premium interest rates on a new auto loan, there's good news: you control your credit score! No matter how low your current score easy, you can take simple, effective steps to raise your score in a matter of months. And the higher your credit score rises, the better deal you can expect on an auto loan!
Your credit score and auto loans
Many consumers begin their auto finance process at their bank, only to be informed by the loan officer that their request has been denied. Some banks offer auto financing exclusively to customers with prime credit. But people with sub-prime credit still have lots of options open to them. Even if you've been turned down in the past for an auto loan due to your credit, an online auto lending matching service can provide you with a list of auto lenders who value your service.
Why bother to learn about my credit score?
Demystifying the credit score is the best way get control of your credit. It's also the best way to negotiate a deal for yourself with the auto lending industry. When you understand your credit score, you won't feel so intimidated by lending officers who cite your subprime status as the reason they can't offer you a better deal on auto finance. By educating yourself on the basics of credit score and auto loans, you'll have the confidence you need to say "No" when you're not satisfied with an offer. You'll also know how to recognize a great deal for your credit rating when it comes along!
So what's in my credit score?
Your credit score is calculated by Fair Isaac & Company (FICO) using information reported to the three national credit bureaus (Equifax, Experian, and TransUnion). Your credit score ranges from 300 to 850, with 723 as the national median score. There are five weighted categories that determine your credit score:
- payment history (35%)
- total debt (30%)
- length of credit history (15%)
- new credit (10%)
- types of credit used (10%)
The fastest way to improve your score
No single category determines your credit score. Depending on your personal situation, you may have to improve one or more areas of your financial management in order to strengthen your credit report. But payment history is the most heavily weighted category, accounted for 35% of your credit score. If you have a "casual" ethic when it comes to paying your bills on time, the most effective way to increase your credit score is by improving your payment history. Please read the next page for buying tips!
