Top Credit Report and Credit Score Tips

Car buying can be a tricky purchase. You are negotiating the car price, the auto loan rate, the extended warranty, the price for your current car, and shopping for insurance. There are a few things you can do (every year) to make this purchase easier. For one, order your instant online credit reports yearly. Obtaining your instant online credit reports each year will give you a chance to fix any credit reporting errors. We’ve compiled this list of credit report and credit score tips to make car buying easy.

Credit Tip #1: Obtaining Instant Credit Reports

Order instant online credit reports and credit scores yearly. These reports will show your current and past credit cards, auto loans, mortgages, and your payment history for each account. These reports also reveal to lenders how much you owe on each of the accounts. You can obtain all three instant online credit reports and credit scores (Experian, Equifax, and Transunion) with credit report companies, such as, and MyFICO.

As mentioned above, everyone is entitled to a free yearly credit report. Whether you are purchasing a vehicle, applying for credit cards, or buying a home, take advantage of this freebie. When you are obtaining your own credit report, it does not show as an inquiry. By obtaining your credit report yearly, you can correct inaccuracies before you need an approval for a loan or credit card.

Best Deals: Credit Reports and Credit Scores

1 Instant Credit Report & 1 Credit Score $14.95
Equifax Credit Report $15.95

3 Instant Credit Reports (no Credit Score)

Equifax Credit Report $29.95

3 Instant Credit Reports & 1 Credit Score

Equifax Credit Report $39.95

3 Instant Credit Reports & 3 Credit Scores $39.95
MyFICO $47.85

*NOTE: Posted rates are current as of September 30, 2007 and may be changed at any time by the third parties. Pricing may be confirmed by visiting the third party websites.

Credit Tip #2: Understanding Your Credit Scores

Everyone is entitled to a free yearly credit report. However, the free yearly credit report does not include your credit scores. Credit scores are what the Auto Finance Manager uses to determine the interest rate for an auto loan. If you only want to obtain one instant credit report, (an affiliate of Experian) and Equifax Credit Report sell individual report/credit score packages.

FICO (Fair Isaac Corporation) Score: This is your credit score. It can range from 300 up to 850 and represents your credit-worthiness. Consumers with flawed credit history will have lower credit scores than consumers with excellent credit history.

Things that can bring down your FICO score (credit score)

1. Filing Bankruptcy

2. Late payments to loans and credit cards (more than 30 days late)

3. Judgments

4. Collections

5. A Vehicle Repossession

6. Liens (property liens, property tax liens, federal tax liens, and state tax liens)

7. Consumer counseling (credit counseling)

How much you owe on an account vs. how much is available on the account can also impact your credit score. Example: If you have an American Express credit card with a limit of $10,000 and your balance is $9,999, you have “maxed” out this card. If you have numerous credit cards that are “maxed” out, this can lower your credit scores.

Credit Tip #3: Credit Scores and Car Financing

Car dealerships use terms such as “OAC: On Approved Credit” for the advertised low auto loan rate incentives. Typically, these low APR offers are reserved for consumers with FICO scores of 680 or higher.

Low Credit Scores = Higher Interest Rates

High FICO Scores = Lower Interest Rates

Auto finance managers normally obtain more than one credit report and credit score to determine whether a customer qualifies for a low APR offer. Since the information from each instant credit report can vary, it is wise to obtain all three of your yearly credit reports.

Once you have your credit report and credit scores, you can shop for the lowest auto loan rate based on your instant credit report results. Just like shopping for the lowest price on a car, shopping for the lowest interest rate for your auto loan can save you thousands of dollars. It is wise to have an approved instant auto loan prior to accepting a loan through a dealership. This provides you with a back-up plan in case the dealership offers a higher interest rate. There are several websites that provide instant online applications for auto loans, such as MyAutoLoan.

Visit these articles to read more about Auto Loans 101 , Dealer Loan vs. Cash Rebate , and Tips for Low APR Loan Offers .