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Credit Score Auto Loans

Many auto loans are based upon a car buyer’s credit score. In these credit score auto loans the credit score determines how much the buyer can borrow and what interest rate they will pay on the auto loan.

In most credit score auto loans those with good that is higher credit scores will pay less in auto loan interest. Those with lower or worse credit scores will usually pay higher interest on a credit score auto loan.

Credit score auto loans can be a really good deal for people with good credit scores but a bad deal for those with bad credit. Generally, people with good credit scores should try to get credit score auto loans while those with bad credit should avoid them.

Credit Scores and Auto Loans

A person’s credit score is a numerical ratio based upon an individual’s credit history. An individual’s credit history is simply a record of their business with creditors and lenders.  A typical credit report will list a person’s accounts and whether they have any unpaid bills, unpaid loans, bankruptcies or negative information.

Negative information on a person’s credit score causes it to go down. The lower the credit score, the harder a time a person will have borrowing money. The higher the credit score, the easier it will be for a person to borrow money. Negative information includes such factors as bankruptcies, unpaid bills, unpaid accounts, overdrawn bank accounts and late payments.

Credit scores are compiled by the big three credit bureaus. The big three credit bureaus are simply clearing houses for information they do not verify the data’s accuracy. It is the responsibility of a consumer to keep inaccurate information out of their credit record.

Credit Score Affects Auto Loans

Before seeking credit score auto loans a person should get a copy of their credit report and read it. This way an individual can determine if the credit rating will help or hinder the auto buying process. A person with a good credit score should be able to get a good deal on an auto loan.

An individual with a really bad credit score should consider seeking out a no credit report auto lender. Such lenders issue auto loans based purely upon a person’s income. Unfortunately such lenders charge much higher interest rates.

A person should check the credit report carefully because such reports often contain errors. If an individual finds errors on their credit report they can contact the credit bureaus and have them removed from it.

How to Affect Your Credit Score

Typing the words credit report into a search engine should help a borrower get a copy of their credit report. Every consumer is entitled to a free copy of their credit report from the big three credit bureaus: Transunion, Equifax and Experian. The consumer can get this information by visiting the Big Three’s websites.

It is best to get a credit report and check your credit score before going car shopping.  One thing to remember is that your credit score actually goes down whenever a lender pulls your credit report. This means that applying for several credit score auto loans can cause your credit score to go down and make it harder to get a loan. Only apply for an auto loan when you are sure that you will be approved for the auto loan.