If you are thinking of applying for an auto loan but are not sure where you stand credit wise here is what you need to know about your credit score before you apply for a bad credit car loan
If you already know
If you already know you have bad credit or if you’ve been turned down at a dealer for a car loan, you can probably skip this article and go straight to our bad credit car loan application. We know, because at Auto Credit Express we’ve been working with bad credit car buyers for the past twenty years.
Using this experience and after observing the embarrassment and difficulties that customers with bad credit often face, we designed a web site highlighted by a bad credit auto loan application. We then match up these applicants with dealerships in their area that specialize in customer credit issues – dealers that look for ways to get you approved, instead telling you they can’t help.
Most other options, including buying a vehicle from a tote the note, we finance anyone car dealer, won’t help you down the road because usually these dealers don’t report your car payments to the credit bureaus. At the same time, taking out a loan through a dealer with a bad credit lender without understanding the process can also create problems. In both instances, the result could be repossession – setting your credit repair efforts back even further.
But first things first: do you know if you really have bad credit? If not, you could qualify for auto loans for people with fair credit or even good credit.
How to find out
To find out, 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 bureau per year), go to www.annualcreditreport.com. To find out your credit scores, you’ll need to pay for and order them from each of the three bureaus.
The alternative is to visit a site such as www.FreeScore360.com. For a fee, you’ll receive all three reports and all three credit scores at once. Once you receive your scores, it’s time to interpret them.
The credit scoring model is the same.
All three credit 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 an EMPIRICA score. The three bureaus also developed a new score, not from FICO, called VantageScore.
In a perfect world, all three FICO or VantageScore scores should be the same, but they’re not. Usually the reason for the differences has to do with the information appearing on your credit reports from each of the bureaus.
Unless your credit file is fairly new, there are bound to be discrepancies between your three credit reports. These reasons 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 one bureau longer than another to remove an old credit file
4. One or two of the bureaus may be reporting inaccurate or incomplete credit information
Any one of these factors, as well as others, can result in different scores. In addition, car dealers use what is known as an “auto enhanced” score that gives more weight to your car loans – meaning that you now have another type of score to deal with, as well.
Where your score fits in
Once you know the reasons for the differences in your FICO scores and VantageScore scores, it’s time to see where your score fits in and if you qualify for auto loans for people with fair credit.
Here is how Experian tiers 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
The Bottom Line
By knowing your credit score and what’s in your credit reports, you’ll know if you qualify for auto loans for people with fair credit – usually a FICO score in the 600 to 700 range with previous auto credit history.
If you fall below this range, Auto Credit Express specializes in placing customers with bad 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 this is the case ad you are serious about getting your car credit back on track, you can begin a new chapter in your life by filling out our bad credit car loan application now.