Monthly Archives: November 2011
Lies about Credit Scores
Every one of us has applied for any kind of loan at one point in our lives. Whether it is for a home mortgage, car loan or credit card loan, your credit report that contains your credit scores will be the basis to determine if your creditor will give you the best deals and friendliest interest rates around. A good or clean credit score can get your application approved. There are many lies that are circulated by creditors and other people who are planning to benefit on your ignorance.
One of the lies that are running around is that the frequent checking of your credit scores will affect your chances at applying for any loan because you will see a decrease in your credit score due to this simple act. If it was you who are checking on your credit scores this will not be credited against you; this is what we call as soft inquiry. If on the other hand you are applying for several credits just be sure that you do so within the same time period so that the inquiry will be counted as one. This is what is considered as hard inquiry that can affect your credit scores when not done in the right way.
Another lie that runs around is that there is a credit blacklist that the names of people who should not be lend any money. This is far from the truth since no such list exists. Once lenders see your credit scores they will either grant you that loan or not. In some cases even a bad credit score will not hinder you from getting a loan but you will pay for higher interest rates. Even if whatever race, religion and political groups you are in this is in no way deters you from being approved for a loan.
Another lie that goes around is that lenders can look at your credit report without you knowing it. In the first place they cannot see your credit report without a written permission from you. If you think that because FICO score exists that the lie about you having a single basis for you credit scores then you are wrong. Lenders have their own equations and methods of determining if you are credit worthy or not. They do not just rely on the credit scores found in your credit report coming from the credit bureaus.
If you think that just because you have never applied for credit that lenders will jump at the chance of letting your borrow money this is not so. Some factors are to be considered too like a record of your payment history and a mixture of varied credit applications. In summary, the only way for you not to be victimized by such lies and other kinds of lie is to educate yourself. Being ignorant about the truth will not exempt you from suffering the consequences of bad decisions because you were ill informed. It is not an excuse to be ignorant when there is available information that can educate you about the truth about your credit scores.
Credit Score- Getting an Auto Loan
After a long period of dreaming of riding that car that you desire and deciding to make that dream become reality contain yourself. Before you buy that car you got to check if things are in order in terms of your credit scores which you can view through your credit report. Minor mistakes that you have overlooked can cause you a lot of headache later on. The three major credit bureau composing of Experian, Equifax and TransUnion all gather information on your payment history which constitutes your credit report. They will gather all of the information that concerns you, like your confidential information, your debt and payment history and any other record such as bankruptcies.
These credit bureaus can give you a score starting from the lowest to the highest like 300 to 850. Lenders based their approval of your car loan from the credit score that they will see in your credit report because it speaks of your credit worthiness. If in case a lender decides to risk by approving your loan, he will definitely charge you with higher interest rates. It is a must to get a copy of all three of your credit reports if you are planning to buy a car.
The good news for those who have bad credit scores you can still look over your credit report to see if there were mistakes so that you can have this corrected and see an instant improvement on your score otherwise you have to set aside your car loan plans and wait for the proper timing until you have done your part to improve your credit scores. It will take patience on your part since you have to pay your debt and bills on time for the next few months or so.
There are online calculators that you can use that can help you calculate how much you can save when your credit score reaches a certain range. Keep old accounts that you have in order to be given a score for keeping the longest credit history. Do not just close other credit accounts that you might have because it gives your credit score a boost that it needs. Never trade in a car that still owes money since you may be shouldering the unpaid dues that the previous owner has left behind.
In summary, having a bad credit means you got to work on to improve your credit score for your car loan and think of your loan application later on after things have stabilize for you credit wise. Do not be ignorant by educating yourself about the available online information on how to improve your credit score. Learn to pay attention to your documents before you sign them because for those with low credit scores some months may be added to your loan increasing the amount that you need to pay. A good way of being approved with your loan is if you are earning at least $1,600 a month together with a stable employment history. This shows your creditor that you are capable of paying what you owe aside from of course your good credit score in your credit report.