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Until 8 years ago or so, I had no idea what a personal credit report even looked like....or what it even said about me.
Even worse, I had absolutely no idea what my Credit Score was and what it meant to my bank accounts. A few years spent in the Automotive Industry opened my eyes.
Now it's time for me to open yours.
Did you know that something as ridiculous as a 2 point drop in your credit score will force you to spend almost $1,100 more on a 5 year car loan.
That's right - if your credit score drops from a 700 to a 698....you are no longer a Tier 1 Credit Risk....and the Interest Rate you'll now pay is 2% - 4% higher. You might as well just hand-over your wallet or purse.
Here's a bit more info for you regarding your personal credit report and credit score....so you can hold on to you wallet or purse!
Has Your Credit Score Taken A Hit
Have you moved in the last 24 months? If so, your personal credit report will indicate that....and your Credit Score will decrease
Have you ever done something as simple as be 30 days overdue on a single bill....in the last 7 years? If so, a delinquency code is on your personal credit report and your credit score has been decreased.
Have you changed Jobs in the last 24 months? That will negatively impact your personal credit report as well.
Have you ever asked for a credit limit increase on any of your credit cards? That negatively impacts your personal credit report as well.
Have you been transferring Credit Card balances from one Credit Card to another to take advantage of lower interest rates? It's a mistake that millions make every month....and it severely impacts your credit report every time you do it.
Last year, 10 million people were victims of identity theft. And most of them did not find out about the theft till they applied for credit, were turned down....and then decided to review their personal credit report.
On average, victims ofIdentity TheftOfficial Social Security & FTC Identity Theft Info labor for 16 months, waste almost 200 hundred hours of their personal time and spend more than $1000 clearing their names.
Other than Identify Theft, all of the examples listed above can be turned around - if you know how Credit Reports and Credit Scores work!
Read on!
What Your Credit Report Says And How It's Used
The actual credit scoring system and credit report was developed by a company called Fair-Isaac (a quasi-governmental-type group). Today, all that Data is now managed by Trans Union, Experian and Equifax.
These three companies have complete control over what gets reported and how it impacts your credit scores and personal credit reports.
And every Lending Institution in the Country relies on data from one of the three companies - each and every single time they have to make a credit decision.
Here's an example - US Bank uses Equifax, Wells Fargo Bank uses Experian and Honda Finance uses Trans Union.
Each assigns a credit score, based on the history in your credit report, which determines if you'll get the credit you're wanting....and what interest rate you'll end up with.
Credit Scores are generally broken down as follows -
700+ Score - you're considered Tier 1 - considered excellent by lenders and typically offered the best rates.
650 - 699 - you're considered Tier 2 - considered good by lenders and typically offered interest rates 1% - 4% higher than Tier 1 borrowers.
600 - 649 - you're considered Tier 3 - considered fair by lenders and typically offered rates between 8% and 12%.
550 - 599 - you're considered Tier 4 - considered poor by lender and typically offered rates between 13% and 22%.
350 - 499 - you're considered Tier 5 - considered very poor by lenders and typically offered interest rates similar to what the Mafia lends at.
Get Your Credit Report For Free....Sort Of
Recently, I've been seeing a lot of advertising on the Internet and TV offering to provide you a Free Personal Credit Report. Heck, there's probably 200,000 Web Sites that make that offer.
Ok - listen carefully - almost 99% of those ad's are a crock.
There are only two ways to get a FREE Credit Report. And yes, they both have string's attached.
The first way to get a Free Credit Report.... is to get turned down for credit.
The second way is to wait for your once-a-year window to request your Free Credit Report. This is a newer program just recently put in place (2005) which was mandated by the Feds.
The Web Site you need to visit to see if it's "your time" to get Free Credit Reports is Annual Credit Report.com.
Whether you can get the "Freebie" Credit Report now or not, there is still one very, very important piece of data missing....
Your Credit Score
Yep, that's right. You get the "Free" Credit Report....without a Credit Score. You get only half the information you need to truly understand what's up with your Credit.
That's like ordering a "King Cut" of Prime Rib and getting the "Petite Cut".
So, you need to get hold of your score. And the only way to do that is....pay for it.
Why Your Credit Score Is THE Most Important Item On Your Credit Report
Whenever you apply for credit, the first thing the lender or creditor does is pull your Credit Report....and find your credit score.
The lender then knows what the score is and begins to make his or her decision regarding your request and the terms that will be offered to you.
Here's a real-life example of what happens in the U.S. every single day - at least 10,000 times a day....
Let's say you're looking to purchase a new car - it's a very popular sedan that currently offers Manufacturer Financing of 2.9% for 60 months.
You go through the entire buying process, finally agree to a price and are ready to finish your new car purchase
You then give the Dealer all of your personal information and they run a credit report. You sit back and get ready to finish up. Then the Salesperson walks "slooowwwly" back to where you are sitting.
He says "I'm sorry, but your credit score doesn't qualify for the 2.9% financing".
Every day, thousands of folks are absolutely shocked when the salesperson tells them they don't qualify for the loan they wanted.
You see, that special 2.9% financing requires a 720 Credit Score and no record of any delinquencies on your personal credit report.
It's humiliating....and something you definitely were not expecting. The real problem here is this - you don't know what your credit score is and therefore, you don't know what terms and conditions you qualify for. It's a scenario you can't win.
Now, the best Interest Rate you now qualify for is 5.9% for 60 months, so you'll be paying $46 a month extra - or $2,760 during the term of that loan.
This wonderful practice happens every day. And the only way it's going to stop, is for you to have a current copy of your Credit Report with a Credit Score listed.
I suggest getting your complete credit report form Trans Union. They have very strict scoring models and if you score well with them, you don't need to worry what Credit Bureau a Lender uses.
Spend a few bucks now.....and save yourself a lot of grief later.
I do have an obligation to point out that not all Car Makers, Dealers, Salespeople, Insurance Companies and Banks are greedy or crooked. This site is dedicated to honest Companies and their Professional Employees who've grown weary of the ignorant and classless giving the automotive related industry a black eye......a black eye that I feel is very close to being permanent.
By using these new and used car guides, I hope to be able to help you find the Best Businesses, and the Professionals that represent them, with very little effort on your part and help you....
Save More Money and More Time Than You Ever Have Before.
It is also my hope that these Companies and the Professionals that represent them will have more business than they can handle - a reward they justly deserve.
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I guarantee that you will have an exceptional experience the next time you buy a car, van, truck or SUV - again, thank you for visiting this Web Site!
Tom O'Leary - "A Concerned Dad....and Automotive Analyst"
New Car Purchase - Exceptional New Car Purchase Advice and Automobile Purchase Strategies for your next new car or used automobile purchase.
Feel free to e-mail me at: Tom at my new car purchase (no spaces) dot com - or take a few seconds to send a question or comment by Clicking here
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