Many car buyers don't check their credit scores before they apply for a car loan. Heck, many people don't check their credit scores at all.
Every person has three credit scores based on three credit bureaus: Equifax, Experian, and TransUnion. They use different models to determine your credit score but any variations will be slight. It would be good however to know exactly what your score is for each because you will never know which standard creditors use when reviewing your credit history.
In any case, what you need to know are the important numbers. Credit scores range from 300-850. A person with a credit score of 680 or more is considered to have good credit.
This means that that person is reliable when it comes to meeting loan obligations. Hence, that person pose less risk for lenders. The reward would be lower interest rates. If you have a perfect credit score, you could even qualify for loans with 0% interest rates.
Therefore, the lower your credit score, the higher the interest rates.
Ideally, you'd want to have good credit to benefit from low interest rates. Unfortunately, majority of Americans have bad credit.
If you ask me, I'd say that it is always better to always work out your finances to improve your credit score until you are considered to have good credit.
However, it doesn't mean that you can't get a reasonable car loan if you have bad credit.
Nowadays, because of an increasing subprime market, there are many 'bad credit car loan' offers available out there offered by willing lenders.
There are online services that provide useful infromation and access to the various car loan offers. People can easily compare the rates and determine which one is the most reasonable.
Of course, you have to know your credit score to make an honest assessment since it is only through your credit score that you can more or less determine which car loan rates you qualify for. Knowing the terms available to you gives you better chance to avoid getting deals that require you to pay an even higher interest than necessary.
But then again, if you really have bad credit (like scores below 500), it is really best for you not to get a car loan or any loan for that matter. A Really low credit score is a sign that you should start managing your finances and stop applying for new credit. If you don't, you will just dig yourself a deeper hole that you may not get out of because really low credit means really high interest rates that are non-negotiable. Chances are, you will really get more into debt.
The sacrifice you pay for not having a car is less stressing than being in debt all your life. It is just not worth it to force the issue just to have a car.
The bottomline is that you must know your credit score so that you know what course of action to take.
Every person has three credit scores based on three credit bureaus: Equifax, Experian, and TransUnion. They use different models to determine your credit score but any variations will be slight. It would be good however to know exactly what your score is for each because you will never know which standard creditors use when reviewing your credit history.
In any case, what you need to know are the important numbers. Credit scores range from 300-850. A person with a credit score of 680 or more is considered to have good credit.
This means that that person is reliable when it comes to meeting loan obligations. Hence, that person pose less risk for lenders. The reward would be lower interest rates. If you have a perfect credit score, you could even qualify for loans with 0% interest rates.
Therefore, the lower your credit score, the higher the interest rates.
Ideally, you'd want to have good credit to benefit from low interest rates. Unfortunately, majority of Americans have bad credit.
If you ask me, I'd say that it is always better to always work out your finances to improve your credit score until you are considered to have good credit.
However, it doesn't mean that you can't get a reasonable car loan if you have bad credit.
Nowadays, because of an increasing subprime market, there are many 'bad credit car loan' offers available out there offered by willing lenders.
There are online services that provide useful infromation and access to the various car loan offers. People can easily compare the rates and determine which one is the most reasonable.
Of course, you have to know your credit score to make an honest assessment since it is only through your credit score that you can more or less determine which car loan rates you qualify for. Knowing the terms available to you gives you better chance to avoid getting deals that require you to pay an even higher interest than necessary.
But then again, if you really have bad credit (like scores below 500), it is really best for you not to get a car loan or any loan for that matter. A Really low credit score is a sign that you should start managing your finances and stop applying for new credit. If you don't, you will just dig yourself a deeper hole that you may not get out of because really low credit means really high interest rates that are non-negotiable. Chances are, you will really get more into debt.
The sacrifice you pay for not having a car is less stressing than being in debt all your life. It is just not worth it to force the issue just to have a car.
The bottomline is that you must know your credit score so that you know what course of action to take.
1 comment:
Getting loans with bad credit is very easy. This website works really well and really fast.
Post a Comment