If you have poor credit here is what you need to know about your credit score before applying a bad credit car loan
If you know
If you you’ve already been turned down for a conventional car loan, you can probably skip this article and go straight to our qualification page for a bad credit auto loan. We know this is the case, because at Auto Credit Express we’ve been working with bad credit car buyers for more than two decades.
Using our experience and after seeing the embarrassment and frustration that bad credit customers often face, we created a web site featuring a bad credit auto loan application. We then send these applications to dealers that specialize in second chance auto loans.
Other options including a tote the note car loans won’t help you down the road because usually these dealers don’t report loans or car payments to the credit bureaus. This type of loan also involves a greater chance of repossession.
But if you haven’t already applied for a car loan, how do you know if you really have bad credit?
To understand your credit situation, you need to order your credit reports as well as your credit scores. To order all three of your credit reports at no charge (1 each per year), go to www.annualcreditreport.com. To see your credit scores, you’ll need to pay for and then order one from each of the three bureaus.
You can also visit a site such as www.FreeScore360.com. For a fee, you’ll receive all three reports and all three credit scores at the same time.
Now it’s time to interpret them.
All three bureaus, Equifax, Experian and TransUnion, use a version of the FICO score. Equifax calls it a BEACON score, Experian calls theirs the Experian/Fair Isaac Risk Model and at TransUnion it’s called an EMPIRICA score. Together, the three bureaus also share a new score that they created called VantageScore.
If the world was perfect, all three FICO or VantageScore scores would be the same, but they’re not. In most cases, this has to do with the differences in information that appears in each of your credit reports.
Unless your credit file is fairly new, there are bound to be differences between your three credit reports. These include:
1. Some creditors report to only one or two of the three bureaus.
2. It may take one bureau longer than another to report a new creditor
3. It may take one bureau longer than another to remove an old credit file
4. One, two, or all three of the bureaus may be reporting inaccurate or incomplete credit information
Any one of these factors, plus others, can result in differing credit scores. In addition, car dealers use what is known as an “auto enhanced” score that adds weight to your car loan history – meaning that you now have another type of score to deal with, as well.
How your score fits in
Once you know why your FICO scores and VantageScore scores can be different, it’s time to see where these scores fit in and if you qualify for auto loans for less than credit.
As an example, here is how Experian tiers the two credit scores:
FICO Score: 740 plus
FICO Score: 680-739
Vantage Score: 701-800
FICO Score: 620-679
FICO Score: 550-619
FICO Score: less than 550
As we see it
By knowing your credit scores, you’ll know if you qualify for auto loans for less than perfect credit – usually a FICO score in the 550 to 640 range with previous auto credit history.
If you fall into this range, Auto Credit Express specializes in placing customers with this kind of credit with dealers that can help them. These affiliate dealers are knowledgeable and work with a broad spectrum of lenders to ensure you have your best chance at getting approved for a car loan.
So if you are serious about getting your car credit back on track, you can begin a new chapter by filling out our bad credit car loan application now.