Car loans, credit reports and scores, the finance facts

Car loans, credit reports and scores, the finance facts

Buying a car is a big deal for most people. Taking on a car loan is a big deal for everyone, if it isn’t you pay cash for it. In most cases anyway, more on that later. The problem with buying a car is that it is a big deal and many people don’t even realize it. They will buy a car on a whim even though it is going to cost them over twenty thousand dollars on the price tag, thousands more in interest and hundreds more in tax. Not the kind of decision you do on a whim.

Improving your efficiency and skills as a car buyer is well worth the little time it takes to understand the basics. Buying the right car is all about knowing what car you really need, not always what you really want, knowing how much it is really worth and understanding what you should be able to get it for. Buying a car loan is not as intuitive. We all have a good idea if we need a V6, a diesel or a coupe but we are not all so sure what kind of interest rate we should choose or what our credit score is and what kind of car loan it allows us to punt for.

This brief article looks at the basics of credit reports and scores. These are only the basics of this complex but important industry. Having a working knowledge of finance and more specifically car loan finance will save you thousands of dollars, you have never made such a good investment of time.

1)    All credit report companies are not the same. There are three main credit report companies. Each one has marginally different methods and will offer slightly different credit reports. This is mainly because not all of your debtors or service providers will have contacted all three companies and they don’t always communicate fully with each other.

2)    Finding out what your credit report is free. What do you have to lose? Unlike many people believe finding out your credit report is not expensive and does not affect your credit score. What does cost money is to find out your credit score, slight difference. Potential lenders asking for your credit score does affect your credit report and score, you would do well to keep this credit score queries to a minimum.

3)    Mistakes happen, check for errors, they could cost you money.
A bank department could forget to record your last loan payment, a nasty landlord might have lied to the credit report or they might be a mistake related to a parking ticket or a credit card payment. You make mistakes at work so do finance workers, check your credit report regularly it is one of the most important tags to your name.

4)    Your past sticks, really hard. Any payments you fail to make will stick to your credit report for years. If you file bankruptcy you will have in on your record for up to 10 years. It is worth paying on time all the time.