Car Shopping 101: Things to do BEFORE going to the dealership
Many car buyers often end up failing because they fail to check their credit reports first. After you have budgeted the money to purchase your new car, you need to take a look into your credit file. Don’t leave it until the very last minute. Can you imagine the devastation you would feel if you were denied the loan at the very end of the entire process? Think about it: you spend the time going through the cars at the dealership, test driving the ones you like, hammering out a fair price with the dealer, only to apply for credit and get the big no because of your credit score. Is that what you want to deal with?
Why not do things the smart way right from the start? Look into your credit beforehand, before you ever head to your first dealership. Begin the process months in advance. If you happen to have any inaccurate information on your credit report that is causing your score to drop and raising the amount you are going to spend on interest, you have time to get it taken care of. Expect to spend two to three months getting your credit report cleared of any inaccuracies.
Get a Copy of Your Credit Report
Since there are three main credit reporting agencies, you need to get copies of your report from all three. Most of the time, you can get your credit report for less than $10. However, you are entitled to a copy of your credit report for free from each one of the agencies once per 12 months. Make sure to check into this beforehand and see about getting your report for free. If you were recently turned down for credit or you think you might be the victim of fraud, you can also get a copy of your credit report for free. If married, be sure to get one for your spouse also.
What Determines Your Actual Credit Score?
Credit scores are determined based on the following:
- Any outstanding debts you might have.
- Your previous payment history on your debts.
- The length of time you have had credit.
- What type of credit you currently have.
- The amount of new credit you have been trying to get recently.
By taking a look at your credit report, you can easily get an estimate of what your credit score is with the free estimator. Many people fall into the 600-700 credit score range. Most of the time, the best rates are reserved for those who have scores above 700.
Correcting Any Inaccuracies
Take a look at your report to see if there is any inaccurate information that needs to be corrected. Check for accounts that you closed but are still reporting as being open, accounts that aren’t yours, incorrect credit balances or limits and disputes that have already been resolved. See if there is any information that is outdated. Generally speaking, a negative record is going to remain on your report for at least seven years, while bankruptcies remain for 10 years.
Credit reporting agencies are going to have to support anything they have on your record. If they don’t have anything to support the record, they have to remove it. Ask to see proof of the debt. Send letters to companies asking them to correct inaccurate information with the credit bureaus.