CREDIT REPORTS

You’ve probably seen the advertisements on television from auto dealerships who claim to be able to work with any buyer to get an auto loan, regardless of your credit history. “Bad credit or no credit, as long as you have a job, we can get you a guaranteed auto loan!” This seems to be the motto of this sort of dealership. But how exactly are they able to offer auto loans for people with bad credit, when no one else will take on the bad credit borrower?

Auto dealerships can choose to offer you a loan if you have bad credit because they are the ones extending you the credit. There are a few things that will allow an auto dealership to offer guaranteed auto loans for bad credit. The first thing you should know about these loans is that the interest rate on a bad credit auto loan is almost always going to be higher than financing that you apply through for through a credit union, bank or other financial institution. Sometimes auto dealerships will charge up to 20% interest on a bad credit auto loan. Over time, this high interest rate will make it almost impossible to pay off a bad credit auto loan.

It’s not uncommon for credit card companies to raise your credit limits; they do so to benefit you – or do they? The truth is that it depends on who you ask. Many people struggle to have their limit raised, while others have their limits raised automatically. There are a variety of reasons that some find their limits raised while others don’t. Let’s take a look at the criteria that fit both scenarios.

If your credit limit was cut recently by your credit card company, then you may be spinning your wheels to figure out what happened. But the truth is, there are a number of reasons that this can happen – and believe it or not, it may not always be your fault.

So if you find that your credit limit was cut by your credit card company, take a moment to explore some of the reasons that this may have occurred:

• Irresponsible financial behaviors. Okay, this is definitely your fault – unless you’ve been the victim of identity theft. If you’ve spent time running in and out of stores charging everything in sight to your credit card and didn’t pay your bill on time, it won’t take long for you to be deemed financially irresponsible – and have your limit reduced.
• The suffering economy. In the wake of banks closing left and right, you may find that your credit limit was cut simply because there was no money available to back it up if charged. Some banks also feel that because people are losing their jobs, they won’t be able to pay off their balance, and thus are lowering the balance to play it safe.
• Youmight be catching the blame for others’ mishaps. In recent years, some credit card customers have found that their credit limit was cut without them having done anything wrong. What’s happening is that some companies look at something called “behavioral scoring” to decide whether the people who shop in the same places as their customers have bad financial behavior. If they do, you as a customer may catch the blame by having your limit reduced.

Many have wondered whether credit scores and a high credit limit are related, and are surprised to learn that they are. But how do they work in conjunction and affect one another?

Here are a few ways:

• The credit utilization ratio. This ratio basically looks at the balance of your available credit with the amount of debt you have to determine 30% of your FICO score. In short, if you have a high credit limit, then your credit utilization ratio will lower, which raises your FICO score. So if you’re looking for a higher FICO score, asking for your limit to be raised a good route to take.




• The credit inquiry. On the other hand, if you apply for credit often in hopes of raising your credit score, you may be disappointed to learn that with each application comes a new inquiry, and with each inquiry comes a lowering of your score temporarily. To avoid your inquiries causing this problem, you can make all of your inquiries within the same 14-day period. If you do this, they will be grouped together and counted as one inquiry.
• Irresponsible behavior. Another way that credit scores can be affected is through your irresponsible financial behavior. If you make charges without paying off your balances, you are likely to have your high credit limit reduced in a hurry. Of course, if this happens, you will see your FICO score reduce for two reasons – past-due accounts and your credit utilization ratio raising.

Credit card companies and a new financial profiling tactic called behavioral scoring may lower your credit line – and eventually, your credit score – as a result of the financial actions of others. A recent report states that companies have always judged you by your own financial actions, but now, in addition to stricter guidelines, the credit mistakes of others might have negative affects on your credit.

Determining the loan amount you can afford comes down to a number of different variables. Not everyone should request the same amount of money because everyone has different incomes, down payment amounts, and credit scores. Because there is so much to consider when deciding how much you can afford, it’s good to look over your personal situation before making your first move.

ConsiderYour Down Payment

Before applying for an auto loan, it’s a good idea to consider a credit check – but where do you start? The process is actually very simple, and can save you tons of money in the long run. So before you go to purchase a new or used vehicle, take time to learn about how you can check your credit report and FICO score.

Conducting a Credit Check

As distinct from credit counselors or debt management programs, which offer guidance on improving your credit through better financial management, credit repair organizations offer to remove negative information from your credit report. You may have seen advertisements from a credit repair company claiming that they can wipe away your bad credit record and give you a new credit identity; or, they promise to remove negative items from your credit report and boost your credit score.

The truth is, if you simply contact the credit bureaus yourself, you will likely accomplish more on your own than you can with these types of credit repair companies. As an educated consumer, you should be aware that the way some credit repair companies operate is not only ineffective but it can get you in a lot of trouble.

Acquiring auto loans has evolved into a relatively simple process with the advent of online applications. Once upon a time, financing a vehicle meant sitting at a car dealership, possibly for hours, hoping that once the process is complete, you have been approved. But now, sitting behind a computer for just a few minutes can get the job done. To see just how simple it is, let’s look at the typical process of applying for a loan over the internet.

Starting the Process

You can no longer put off renovating your kitchen. The fridge makes all food resemble a science experiment, the dishwasher is nothing more then a drying rack and the floor has linoleum circa 1972. You have worked out a budget and now just need to secure a personal loan, but aren’t sure what type of information will be needed for the personal loan application process.

The first thing to realize is that there are personal loans can be either unsecured or secured. Based on which one you prefer, each one requires different information for the loan process.