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 STEP 2: Get Your Credit History
ALWAYS check your credit history before you go to a dealer or begin any negotiation for a vehicle.
Most people buying a car at a dealer do NOT take this important step … they simply go to the dealer, buy the car and get their financing through the dealership … without bothering to check their own credit history.
This is a GREEN light for the dealership to take advantage of you and make thousands of dollars.
There are two key components to your credit history:
1. Credit Report
2. Credit Score
Your Credit Report shows everything about your financial history including:
a current and previous address
a current and previous employment
a detailed information on mortgage, installment, revolving credit accounts
a companies that have requested or viewed your information
abankruptcies, liens, garnishments and other judgments against you
a procedure for disputing the information
a your rights under the Fair Credit Reporting Act (FCRA)
You are entitled to a FREE copy of our credit report every year from each of the major credit bureaus. Get you annual reports from Annual Credit Report.
Your Credit Score is a number between 300 and 850 which summarizes the information available through your credit reports. Try the fun exercise at Money Central and you’ll get your score estimate. Remember, however, that this is just an estimate … you will need the real score from one of the sites above.
840 750 660 620 340
Unfortunately, the credit score is not FREE but you can obtain one for less than $10 from any of the major credit companies. DO NOT SKIP THIS STEP. The price is minor compared to your savings!
All you need to get access to you history is your social security number, address and date of birth.
Your Credit Score is the single most important factor in financing your vehicle … it determines how much interest you pay on the loan.
4 If your score is above 675, you should have no problem obtaining a good interest rate.
4 If your score is between 600 and 675, you can get a vehicle loan but at a slightly higher rate … and other conditions may be imposed.
4 If your score is below 600, you need to get a No Credit Bad Credit loan ( a subprime loan) which includes a significantly higher interest rate at 21% or higher.
On a $20,000 loan, a monthly payment a 7% is $478 and 21% is $619. The total cost of “poor” credit is $141 per month or $6,768 over the loan period.
If you don’t know your credit score, the dealer will get it for you …but this will only lower your score. And, you cannot trust the dealer to reveal the score or base the interest rate upon it.
Before you go on line to check your credit, you might consider which to choose:
Equifax, along with Experion and TransUnion, is one of the “big three” and a global leader in turning information into credit intelligence. It offers various plans for which you pay nothing if you cancel within 30 days:
$39.95 - Credit Reports from all three credit bureaus and FICO score
$29.95 – Credit Reports from all three credit bureaus … no FICO score
$15.95 – Equifax Credit Report and FICO
Free Credit Reports 360 gives you your free annual credit reports plus three scores. The cost is $29.95 per month but if you cancel within the first 7 days, you will not be charged.
Want some more assistance with your credit? Be sure to get and download “Secrets to Car Buying”. Order the Self Service option or sign up for the Full Service option and get expert personal assistance with the entire process.
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