*Best Selling Vehicle in Us in 09 so far*
(Be Careful, when shopping for a vehicle) All do respect the dealer is just trying to give you the best rate and best payment)
Each determine your credit score:
- your payment history
- account balances
- length of credit history
- new credit
- types of credit in use
That’s a touch on the surface – More importantly I am giving you the NO B.S approach.
Specifically these are the primary factors that are considered in them making a mathematical formula to give you a score.
- Responsibility: are you paying on time?
- Accountability: how much do you owe on each account each month?
- Longevity: How long has each account been open?
- Versatility: How many different types of credit or trade lines do you have?
- Are you a Stuffed PIG? Of the available credit, how much do you “consume” on each account?
Tip- don’t be a stuffed PIG!!
Credit Inquires Don't Affect My Credit?
We all sometimes think that we are savvy consumer at one time or another, so we have all heard of the stories that if I have an Inquire on my credit it will lower my score.
TRUE!
They do effect your credit at least 1 point each inquiry. So lets look at this a little bit deeper. If you apply for a credit card via the Internet or by mail chances are that they will pull your credit and review only 1 time so this is not an issue. Where this comes into play to drastically effect your credit is either house shopping or looking to purchase a brand new vehicle.
I have had clients that only went to just test drive a vehicle and ended up with a credit score of less than 30 points. WHY, because they asked to see your license only to drive it and while you were waiting they were pushing your credit through 20-35 banks and finance companies that they have access to trying to get you financed and also trying to get the lowest rate.
(How does this effect you) well what if you have a 620 score and just wanted to test drive a car and maybe purchase it because your current car is paid off but still has less than 90,000 miles. It still has a couple of more years on it. BOOM you drop to 590 Fico.
You decide to hold off and the payment they were giving you could go towards a house purchase. You go to the bank that you have been with for years and your family as well.
They cannot approve your loan and they have to refer it to broker or a sub-prime broker. That’s what I did- Sub-prime Lending
What this means to you is that you risk possibly getting approved at all to having a high risk loan now and this could cost you thousands in interest because of this..
“INQUIRIES”
I always hear people talking about this and they always say. Credit Inquires don’t effect my credit?
I will inform you that Creditors who see a large list of inquires on your credit report will be more likely to decline your application. This is the second part of “Responsibility”
You need to ask yourself – Is it Responsible to go out and fill out multiple applications at once?
Vehicle Shopping is the WORST! The credit scoring system is supposed to be set up so that multiple credit inquiries within the same industry or same transaction do not lower your score. However in my experience I have personally witnessed this and seen it happen to my Real Estate Clients.
The good thing is that some businesses that do lend money can on their back end override or state a reason why there was this many inquiries. For an instance I had a client buying a vehicle and he was the last to stop at my office. He went to 4 different dealerships and they pulled his credit 34 times.
Results 34 Inquiries. Ooucch
(why would they do that) in his case his score was too low so they were trying to get him his best rate and end result ran it to 34 different banks.
Now we did get him financing but I would recommend that you search online and make an educated guess when the time comes for a new vehicle.
