I
did a tele-seminar this week for a group of women and they asked so
many questions about car loans, credit scores and how to qualify for
the best loan I thought I would pass on these great tips from Aware.
Taking Steps to Boost Your Credit Score
According
to a consumer survey conducted for Americans Well-informed on
Automobile Retailing Economics (AWARE), 80 percent of consumers know
their credit history affects the rate at which they can finance an
automobile.
While this is good news, according to a report
released last month by the Consumer Federation of America (CFA) in
partnership with Washington Mutual (WaMu), consumers mistakenly believe
that factors other than how you’ve handled previous credit affects your
credit score.
For example, according to the CFA and WaMu
survey, 74 percent of consumers incorrectly believe that scores are
influenced by income; 41 percent believe age affects credit scores; and
19 percent even cited ethnicity as factor that affects a credit score.
Essentially, your credit score is a numerical
representation of your credit history. It is not influenced by factors
such as ethnicity or income. It is a measure of how you’ve previously
handled credit. It
takes into account information such as your bill-paying history, the
number and type of accounts you have, late payments, collection
actions, outstanding debt, and the age of your accounts. Using a
statistical formula, these credit factors are translated into points. A
total number of points — a credit score — is calculated to help predict
your creditworthiness.
Your credit history – and therefore your credit score – is an important
factor that helps determine the rate at which you can finance an
automobile. Other factors that affect your annual percentage rate
(APR) include prevailing rates, the amount financed, the terms of the
financing contract, the down payment amount, the vehicle make and
model, competition, market conditions and special offers.
Since a credit score is an important yardstick finance companies use to
determine the risk of lending you money, it’s important to understand
steps you can take to improve your score or, hopefully, keep it at a
high number.
Below are tips from AWARE to help those interested in boosting their credit score.
Know Your Credit Report: Consumers are entitled to one free credit
report each year from each of the three national credit reporting
bureaus. Go to www.annualcreditreport.com to access a free copy of
your credit report annually to ensure there are no errors and that the
information available to lenders is accurate.
Keep it Simple: Understand the importance of credit history. Put
simply, to establish strong credit you must pay your bills on time and
never use all of your available revolving credit.
Get off on the Right Foot: If you are starting out, build good credit
the right way. Set up a checking and savings account to demonstrate
stability to finance companies. Also, you may choose to apply for a
credit card or store credit. If you do so, ensure all your payments are
made on time.
It’s Not too Late to Repair Poor Credit: If you have made mistakes in
the past, identify problem areas that exist in your credit report and
take steps to recover from these mistakes. For example, you may choose
to set up a payment plan to pay off any outstanding credit card or
store credit balances you’re carrying.
Pay Off Debt Rather than Move it Around: Pay off the balance on your
credit card – even if you must do so slowly – rather than moving it
from one credit card to another. By always making payments on time,
you are demonstrating responsible borrowing habits to finance
companies.
These tips were brought to you by AWARE, a non-profit organization
seeking to build a greater understanding about how auto financing
works. AWARE is supported by leaders of the vehicle financing industry,
and is perhaps the only resource that focuses exclusively on auto
financing education in materials, a Web site, and other educational
offerings that are entirely free of marketing, advertising, or sales
efforts. Visit www.AutoFinancing101.org for financing calculators,
tips, and other free educational materials.
At the AskPatty finance center for women,
we make new car loan financing easy. Our new car loan application is
quick and easy. In just a few minutes, you could be saving thousands of
dollars. It doesn't cost anything to fill out the application, and you
might save a bundle. In short, financing a new car loan can be simple and easy.
Click here to qualify for a new car loan today!
Jody DeVere
President
www.askpatty.com
www.carblabber.com
Photo's from Flickr
Related links:
http://www.blogher.org/women-and-men-thinking-differently-about-money
http://www.blogher.org/thing-about-debt
http://blogcritics.org/archives/2005/04/09/170541.php
