Credit Reports – How They Are Compiled

Have you often wondered what information is in a credit report? Many consumers are not fully aware of all of the items that are in the finance reports, and how that can affect their ability to get any kind of credit from a new loan to credit cards. The information that is in the credit report is on all of the credit that you have had, the payments that you have made, and shows any of the negative accounts that you may have. It is important to take care of these items before you are going to try and apply for credit or a loan because if your credit is poor, you may not able to get the money that you need.

If you do find that there are negative items on your finance report that may be affecting the credit that you can receive, it is better to take care of them first and clear up the negative items on the credit report. Once you have cleared any of those items up, you are able to go forward with applying for new credit and improving the credit score. Lenders carefully look at all of the items on your finance report before they approve a credit card or loan, so it is important to know what kind of information is on your credit report before you try to make a big purchase, or apply for a loan with a lender. The amount you have to pay in interest can also be a factor.

Money for a Car: A Guide to Auto Financing

Nobody wants to be the dumb buyer in a car buying deal. You have to be smart or you end up losing more money than you ought to. It is a very common scheme among car buyers to first get money in order to buy a new car.

The term is called “auto financing” and it simply means how you pay for a vehicle. You can finance a car by taking out an auto loan to own a car, in which case, you have two options: You either use the money from the loan to buy the car, or use it for lease.

If this isn’t your first time buying a car, you might already know that the salesman or your car dealer will be checking your credit report before starting with the negotiations. But this is not the only way you can go to get that new car of yours. The seller will try to sweeten the deal and offer you special car finance situations in exchange for throwing yourself totally at his mercy. That is not a path you have to choose.

The key is preparation. Knowing what auto financing options you have before you get to the dealership will mean that you can take charge of your credit and take charge of your car loan.

Just remember, when you negotiate with the salesman for the most favorable auto loan, nothing is permanent until you have it in writing. So haggle and then haggle some more. Once negotiations seem to be over, that’s when the sales contract is prepared.

Inflated Interest Rates

To have the deal agreed upon by you and the salesman be put in writing in a binding contract is top on the list of the things you must do involving auto financing. Often involved at this part of the procedure is to determine monthly auto loan payments based on an interest rate. Now, as you well know, the interest rate varies from car buyer to car buyer. Your credit is only one of the factors and if the interest rate a car buyer qualifies for is inflated, then the dealership can make extra profit off your loan. That’s just one of the pitfalls in auto financing.

Independent Auto Financing

When you have the approved auto financing option on hand, you can then proceed with the deal as a “cash buyer” so to speak as you already have the cash in hand from the loan and you are just buying the car from the dealer with that money. Car salesmen prefer customers to be “monthly payment” buyers as this makes it easier for them to obscure the total cost of the vehicle, to the detriment of your savings. So wizen up and take that independent auto financing option available.

Set a Price Range

Having a budget is the sensible thing to do. If you set a sensible price range for yourself, then you have less reason to go beyond that range and succumb to the temptation of overspending. If you’re really firm on that budget, no amount of sales talk can sway you. One good tip is to ensure that your monthly car payments and related expenses do not exceed about 20% of your monthly net income.

Discounted Financing vs. Rebate

Here’s the dilemma to car buying: Many dealers offer an option between discounted financing or a rebate, but not both. Discounted financing means that you get zero-percent financing while rebate means that you get a certain amount of cash some time after purchase. The common error many car buyers make is that the zero-percent loan will deliver the most savings. But will it really?

Get the Cash Rebate

In most cases, it’s better to get the cash rebate and apply it against the purchase price of the vehicle. If you already have a pre-approved car loan, then that’s even better because you have positively no need of extra financing from your dealer. Just use your car loan to finance the car and let the rebate handle some of the charges.

Finance Info – Establishing Good Credit

Do you know the importance of establishing a good credit rating? If you are looking to buy a new home, or car you need to have a better understanding of how you finance your purchases and how you manage your money.

Companies want to know they are investing in someone who will pay them back and pay on time. Before any company will finance you they will review your credit rating and credit score. They want to know if you constantly have late payments, accounts in collections, or ever filed bankruptcy. Any of these and your attempts to finance your purchase may very well be impossible.

If you work at establishing good credit before you actually need it you will have a much better chance of getting the finance you need, somewhere down the road! You don’t want red flags on your credit score, learn these basic credit habits and improve their peace of mind and your credit score.

Practice these tips to get lower interest rates and better deals the next time you finance a purchase:

1.) On Time All the Time!

This one sounds so simple, yet so many people neglect to pay their bills when their due. Potential lenders are going to have a hard time believing you will pay them on time if your credit report shows you constantly miss payment deadlines. Why would lenders finance your purchase when you present a credit risk? Get into the habit of paying at least the minimum that’s due and pay it early!

2) Credit Cards Balance is the Key!

To appear in the best light the next time you apply for assistance to finance your purchase use credit cards wisely. Two to four is the recommended amount Too many credit cards and you won’t be able to pay them off, too little and you might not have enough credit history.

3) Check your Credit Report Yourself!

Credit reports are issued from three major credit bureaus: Experian, TransUnion, and Equifax. To make sure when you finance your next purchase that they are accurate, you should be keeping a constant watch on your finances. To make sure your finance report is accurate check every three months. If there are any mistakes inform them immediately.

Remember having good credit is about much more than bragging rights. If your finances are not in order your dream home may stay just that…..a dream. Establish good credit habits now. As you finance your purchases work on using the tips above and repairing any bad credit you already have. You will reap the rewards!