Bad Credit Auto Loans

Are you afraid to go shopping for a car because of the embarrassment you may face at the very real possibility of being turned down due to bad credit?

If this is you, you’re not alone. More than ever before, millions are faced with bad credit right now.

What you need right now is a little “credit score infusion”. Your score needs to be high enough so you can qualify for that auto loan you so desperately need.

I Can’t Wait Months To Increase My Credit Score!

I totally understand. In today’s world an auto is a necessity. If you’re lucky enough to still have a job right now, you gotta have a car to get to work.

If you’ve been laid off or just can’t find a job, you need a car to go look for a job.

You need to pick up your kids from daycare, you need to go to the grocery store (jeez…nothing worse than trying to lug 6 grocery bags a mile down the road…)

Whatever the issue is, you won’t get far without wheels, so here’s a few tips you can use to infuse your credit score immediately”.

What’s A Good Score For An Auto Loan?

Different lenders have different criteria in relation to what they deem to be a “good” score. Really, what it all boils down to is “What interest rate am I going to have to pay?”

You can still probably find a lender who will give you a car loan with a credit score of 580, but you’re going to pay a really high interest rate for it.

Get yourself bumped up to over 600 and better yet, over 620, and you have a few more options, but the rate you’re going to pay is still not going to be pleasant.

If you have scores in the range of 650 to 680, interest rates are going to be decent.

Get yourself over 700 and you’ve got shopping power baby!

So, Where Do I Get My Credit Score?

There are many scoring models out there, so don’t be fooled.

There can be a 50 to 100 point difference from one credit scoring agency to another, so your best bet is to stick with your FICO Score. This score is derived by Equifax and is the credit score that most lenders use, so you can be pretty confident with the score you receive.

You can get your FICO credit score for $9.95 if you sign up for their Score Watch program. This is the quickest way to get your score, and a great way to monitor how it’s going to shoot up after I teach you a few tricks later in this article.

You can access all three of your credit reports for free at www.annualcreditreport.com as well, but you will then have to pay around $7 to $10 to purchase your score from each of the three major credit reporting agencies.

You can only do this once a year for free, and in my book Surviving Your Credit Meltdown, I walk you through an 8 Step System to erase negative marks off your credit, so you might want to save the one chance you have this year, until after you read the book. (You can still apply my system if you’ve already accessed www.annualcreditreport.com once this year, but you’ll have to do it all through snail mail.)

How Do I Get My Scores Up Quickly?

You’d be surprised at how much inaccurate information is reported without you even being aware of it. If you don’t check your credit on a regular basis (once a year), then I’m sure you’ve got some mis-information being reported on you as well.

Go over every account that is showing on your credit.

If you have accounts showing late payments that were never late, dispute those baby! Even if you’re not sure if they really were late….dispute it anyway!

If you have multiple collection accounts showing for the same debt, dispute ‘em!

If you have recent inquiries that are showing up that you do not recognize, dispute ‘em!

What Is The Best Way To Dispute?

Again, you can do this all on-line through www.AnnualCreditReport.com, but you only get one shot a year to dispute everything you can on-line and there is so much more you can do than what I’m outlining right here.

If you want take the hour or so and do a really thorough job the first time, I’d recommend getting Surviving Your Credit Meltdown and going through each step to make sure you’re optimizing your report as best as you can the first time. If you purchase the System, you’ll also get a video tutorial walking you through the dispute process in Equifax, Experian & Transunion while on AnnualCreditReport.com, so you know exactly what and how to dispute and what to expect.

If you don’t have time to do it right now, there’s a host of creditor and credit bureau sample letters you can use to send in to the credit bureaus that will accomplish the same thing, and you can save your free yearly check until you have a little more time to spend on it. These letters just take a day or two longer because you have to send them via the mail.

Don’t worry about sending in any kind of proof to the credit bureau’s of anything you’re disputing. (Just eliminate that part out of the letter template.) They don’t keep it for the first-time dispute process anyway because on the first go-around, all they’re going to do is contact the creditor in dispute and ask them to validate the information.

If the creditor finds a record of what you’re disputing, it stays on, if not, then it comes off. You’d be surprised how many items just come off because of lousy record keeping or laziness on the part of the human involved.

There is much more you can do after the first go-around with the bureaus, but this is a quick and efficient way to increase your scores quickly when you’re in a hurry.

Now….let’s get that car loan!

Okay…..with minimal effort and a little luck, you’ve increased your credit score higher than it was before…..good job!

Now, you need financing…..but where to go?

If you go directly to auto dealerships, you need to know that in order to get a loan, your credit report will be pulled, and pulled, and pulled…..you get my drift right?

This will result in multiple “hard inquiries” on your credit report, and by going to the dealerships first, you will never find out why you are not being approved and the inquiries will just keep adding up. (For more info on “inquiries, click here)

**You do however have a 14 day grace period when shopping for an auto loan. Your credit can be pulled multiple times within that 14 day period and it will only count as one inquiry, so you need to be sure that you’re seriously ready to buy that car once your credit starts being pulled. If you keep having your credit pulled after that, kiss your new score good-bye…

What you really want is to be pre-approved. That way you can walk into ANY dealership with a loan that you can afford already in place and you’ll know exactly how much you can afford.

Next Step: Go Visit Your Local Bank

If your new credit score is 620 or higher, the best thing you can do for yourself is go to your local bank and apply for an auto loan there first. (I’m talking about walking into your branch and talking to a live human.)

You want to speak with someone who can pre-qualify you for a loan based on the banks guidelines.

· Maybe you don’t have enough income to qualify for that Ferrari you wanted……(yeah, probably not…) Yet, the loan officer will be able to advise you how much you can qualify for, as long as this is your only issue.

· If you’re turned down because of your score, you can ask what is the minimum score they require to get approved. This will tell you whether or not you’re going to need sub-prime financing or not.

What If I Can’t Qualify For A Bank Car Loan?

If you’re not “bankable” just yet, don’t worry…..there are still lenders out there that will give you a loan, but the rate isn’t going to be as pretty.

I’d first ask the loan officer at the bank if they have anyone they’d recommend to refer you to.

If you're ready to pocket all the extra cash you pour into your gas guzzler, Gas Saver Auto Loans can help you get a loan on a fuel-efficient vehicle. You can easily apply for a loan in seconds, even if you don't have credit, have bad credit, or have filed for bankruptcy in the past.

You can also do a search on the net for “bad credit auto loans” and you’ll get a slew of links to click on. Some of these sites will search multiple lenders for you and could save you some time.

If you like a more personal approach, you can look in your local yellow pages for “finance companies”, like Household Finance or American General. Word of caution here though, finance companies usually carry much higher rates, so be sure to shop around.

What If The Payments Aren’t Affordable?

Most people worry about whether or not they’ll be able to make the monthly payments on a loan without taking into account the loan’s term, total interest paid, and loan origination fees or pre-payment penalties.

Generally, the lowest rates on auto loans are available on short-term loans, from 12 to 36 months, which mean a large monthly payment but lower amounts of interest.

Longer-term loans often come with higher interest rates.

When you calculate the total price of your new vehicle, include the interest costs over the years.

If it seems like too much for you, try to renegotiate the interest rate, offer a larger down payment, or shorten the term of the loan.

Which Credit Inquiries Lower Your Score?

Excessive Inquiries

Excessive inquiries to your credit can drastically reduce your credit score, although certain types of inquires don’t affect it at all. You need to know which types negatively affect your credit, so you can keep them to a minimum in order to ensure optimal credit scores on a consistent basis.

The Hard Inquiry

When you fill out a credit application you authorize a bank, credit card company or lender to view your credit history. This is known as a hard inquiry and is done with “permissible purpose”.

Collection agencies may also pull a hard inquiry. Hard inquiries can take points from your credit score. Many hard inquiries are also viewed negatively by creditors and can be used as a reason to deny you credit.

The Soft Inquiry

A soft inquiry may not have been authorized by you. Your existing creditors pull your credit reports to see how you are paying your other bills and if any problems exist. They also do this as an excuse to invoke “universal default” which can raise your current interest rate. Lenders and credit card issuers also pull soft inquiries in order to screen you for pre-approved offers. Soft inquiries do not take points away from your credit score and are supposedly only viewable by you.

Pre-Approved Offers

When you receive a “pre-approved” offer in the mail, this means a bank or credit card

company has screened your credit and made a soft inquiry. However, even when you receive a pre-approved credit offer in the mail and you respond, a hard inquiry will most likely be pulled. This means a hard inquiry will be added to your credit files and points will be deducted from your credit score.

You can opt out of these types of inquiries by visiting OptOutPrescreen.com. You can opt-out of these types of offers for 5 years with an on-line submission. If you want to permanently opt-out of these types of offers, the site will provide you with a letter you can print, sign and mail in which will eliminate you from these types of offers forever.

Why Hard Credit Inquiries Are Bad

Credit grantors view too many credit inquiries as a sign of financial trouble. The creditor has no way of knowing if you were approved for all of the credit you applied for. Your credit inquiry does not indicate approval or denial. They may assume you received the credit lines that are showing as inquiries. Additionally hard credit inquiries take away points from your credit score. Too many hard inquiries could result in a denial of credit and bring down your credit score.

Mortgage and Auto Loan Inquiries

It is wise to shop around for the best interest rates when making a major purchase such as a house or automobile. But shopping around for the best rates may result in many inquiries during the shopping phase. The credit reporting agencies supposedly have a buffer to prevent your credit scores from taking a dive for too many inquiries when shopping around for interest rates.

All inquiries related to a mortgage loan or auto loan done within a 14-day period are counted as one inquiry. The issue with this is that the inquiries are supposed to indicate a mortgage or auto inquiry on your credit report, but there is no way of knowing if a lender or bank has noted that inquiry correctly. Just be informed and ask your lender before applying, especially at a car dealership. They may run your credit through many lenders in order to get you approved.

How Long Do Inquiries Remain On Your Credit Report?

All credit inquiries remain on your credit report for two years and should drop off automatically when the two years have expired.

All “hard” inquiries show up when a lender or creditor request your credit, whereas “soft” inquiries only show up when you request your own credit reports.

Most credit granters disregard credit inquiries after 6 months. While they do remain on your credit reports for 2 years, they are not heavily weighed in decisions to grant credit.

Erasing credit inquiries

The credit reporting agencies will tell you that credit inquiries are just a statement of fact and cannot be removed. This is not true. FRCA Rules state that “Any information can be disputed and must be investigated”. You need not worry about soft inquiries as they do not count against your credit score. Credit inquiries made without “permissible purpose” should be disputed.

The FCRA states you can sue for damages in the amount of $1,000 for each instance a company pulled your credit report without your permission.

Credit inquiries made without your permission may indicate fraud, in which case the credit reporting agencies may put a fraud alert in your files. A fraud alert will make it difficult for anyone, including you, to access your credit report without your permission.

Permissible purpose would be if you applied for credit, one of your current creditors may pull a hard inquiry or a collection agency holding a debt may pull your credit report.

Is Disputing Credit Inquiries Worth The Time?

If the credit inquiry is really a mystery to you and you don’t recall requesting credit then you really should initiate an investigation with the credit reporting agencies. It could be a matter of fraud and you want to handle that immediately. A fraud alert may be put in your files in order to protect you. Fraud alerts will also keep you from applying for credit easily.

Your time may be better spent disputing other types of information that would significantly raise your credit score if deleted.

For more information, visit: http://www.RepairCreditTrauma.com

Behind On Credit Card Payments?

Job losses Are Going To Affect Credit Card Payments…

The news is riddled lately with massive lay-offs of employees. It’s also taking anywhere from 3 to 6 months to get another job, and even then, the salary may not be as much as you were previously making. What is going to happen in the interim? Do you have enough saved to pay your rent or your house payments, along with those never ending credit card bills? More than likely, you don’t. What is going to be the first thing to go? Yup….you guessed it, the credit cards.

What Happens If You Can’t Make Your Payments?

If you let the bills go unpaid for too long, they’re going to end up in “charged-off” status with the original creditor and then the account is going to be sold to a collection company. The collections agency will then pursue payment of the account more aggressively. This is considered a very negative occurrence for your credit scores, short of filing for bankruptcy.

If the balance is large enough, the creditor may consider taking you to court and obtaining a judgment against you. Not only will the judgment be recorded against any property that you own in that county, but the judge can also order that your wages be garnished from your employer, or they can order that your bank account be levied to pay for the debt. If you've ever had this happen to you, it can be devastating to find out your bank account has been sucked dry and whatever money you did have in the account, is now gone forever.

A judgment is also going to become a public record item which will stay on your credit report for 7 years, and interest is going to continue to accrue until the account has been paid.

What Are Your Options?

If you know you’re not going to be able to make your credit card payments anytime in the near future, you have a few options:

1. Contact your creditors, explain the situation and see if they can work out an arrangement with you, on terms that you’ll be able to meet financially. Make sure to talk to them about the possibility of not reporting the payment reduction to the credit bureaus, so your account does not reflect late payments.

2. Contact a bankruptcy attorney and find out if you will be able to pass the 2005 Bankruptcy Means Test, in order to qualify for a Chapter 7 bankruptcy, which is a discharge of all unsecured debts.

3. If you do not qualify for a Chapter 7 bankruptcy, discuss a Chapter 13 bankruptcy with your attorney and find out what the repayment terms will be.

4. Contact a legitimate debt counseling company. The company you choose should counsel you regarding your debt and finances, as well as work with your creditors to reduce your interest rates and set up a structured re-payment plan to pay off all of your debt within a certain period of time.

Which Has Less Negative Effect On Your Credit….BK 13 or Debt Counseling?

If you do not qualify for a Chapter 7 bankruptcy, which a complete discharge of your unsecured debts, you might want to consider repayment arrangements through a debt counseling company versus filing for Chapter 13 bankruptcy.

Both of these options require that you repay your debt for cents on the dollar, and both are accomplished in a set period of time. You’ll need to compare both options and weigh the savings between each, but if the difference is not significant, then as far as your credit is concerned, you’re better off with a debt counseling company.

If you know you’re not going to be able to make your credit card payments, contact a debt counseling company immediately and find out what they can do for you. If they can work out arrangements with your creditors before you ever get behind, your credit report may never feel the effects of your situation. That is the ultimate goal.

By filing for Chapter 13 bankruptcy, this is about as negative as it gets on your credit, not to mention that the public record stays on your credit report for 10 years.

For more information, visit: http://BankruptcyCreditTrauma.com

Raise Your Credit Scores Using This Simple Method

Too much credit card debt results in low credit scores.

It seems as though you’ll never get out from under all those credit card bills doesn’t it? You make a $50 minimum payment on one card, only to see the balance drop by a whopping $5.00 or so….wow….talk about discouraging. At this pace, you’ll possibly have your bills paid off by the time you reach 70! That’s of course assuming you never charge another dollar, which you know is a fantasy. It’s a great goal in a perfect world, but probably not gonna happen.

Once you have multiple credit cards with high balances, you are stuck in a vicious cycle. If you can only afford to make the minimum payment, then 7/8th’s of your payment is going to go to interest and you’re never going to get anywhere in reducing your principal balance. You know you need to do something about it, but what?

Contact your creditors…

It can’t hurt to call all your creditors and ask if they’ll please be kind enough to reduce the interest rates they’re charging on your account. Right now, even the credit card companies are in the midst of a meltdown and they’re cutting back credit limits right and left because some folks are completely defaulting on their debts.

If they hear that you’re working on a plan to try to pay them off, hopefully they’ll be inclined to work with you and possibly reduce your interest rate to help you out. The lower your interest rate is on all your accounts, the faster you’ll be able to pay them off.

Click Here for a Free Script on Negotiating Lower Payments with Creditors

Start by evaluating your expenses…

You got yourself into this mess because you’re charging more than you earn. While it’s fun to go out and buy whatever you want, whenever you want it, at some point it all has to be paid back…..with interest…..that’s kinda like taxes…you just can’t avoid it.

Do you really need that Venti White Mocha, non-fat, no whip, 180 degrees, every day on the way to work? Yeah, yeah, I know…..it wakes you up…..but guess what? You can turn on your coffee pot and fill up your travel mug before you leave, or if that’s too much work, the grocery stores have those coffee singles now. Just boil some water, dip the “tea-like” coffee bag in there, and off you go with portable caffeine…..easy schmeezy. You just saved $3.50 or so…..times 5 = $17.50 a week….times 4 = $70 a month! Hey….you could use that money to pay extra on a credit card bill and see a bigger principal reduction!

How about that $6.00 Guacamole Burger they sell at Carl’s Jr.? Isn’t that the best burger you’ve ever tasted? Throw in some fries and a coke and not only will you get hardening of the arteries, (though the avocado is really good for your hair I’ve heard) but you’ve got about a $9.00 lunch. If you cut that out every day, by the end of the week you’ve saved $45.00 and by the end of the month, you’ve saved $180.00! That’s a nice chunk of change! Just imagine how much principal reduction you’re going to see now!

Are you starting to get the picture here? Just cut out those two things and you have $250.00 extra every month! That can put a good dent in those high credit card balances. Imagine how much more you could save if you just think about the things you buy that you don’t really need. Remember, you don’t have to do this forever….it’s kinda like a diet…..just loose the weight, then you can snack once in awhile within reason, without putting all the weight back on.

Make the “Withdrawal Symptoms” less acute…

First you have to break the “habit” of charging all the time. This in itself is something that requires conscious effort. To help you do this, budget yourself around $100 a month that you’ll put aside in CASH if you want to splurge on lunch or that Pumpkin Spice coffee that ONLY comes out during the holidays. I know you have to have your “fix” once in awhile or else this whole concept is going to go down the drain. Use this money when you are having a “craving” and you just “gotta have it”. This will help alleviate those withdrawal symptoms and make it easier for you to stay on track. Just remember, when that $100 for the month is gone…..no more treats for you, so space it out.

Second tip….carry just one credit card in your wallet for emergencies only. Leave the rest at home. If you don’t carry them with you, even if you do get the urge to spend, you won’t be able to! Oh, by the way, an emergency is defined as something like your car broke down….not Macy’s “one day” sale. Trust me….there are sales going on all the time. Besides….you’ve got enough shoes to wear for the next 10 years I’ll bet!

Pay down the credit card with the lowest balance first…

Work on paying off your debt by making payments on the credit card with lowest balance first. Once you have that account paid off, use the extra money you were spending on the previous account and apply it to the next credit card you have with the lowest balance. Then keep making payments on that account until it’s paid off, and so forth. By doing it this way, you’ll feel a sense of accomplishment that you’re actually getting somewhere, which will give you more motivation to keep on track.

The benefits of paying off your credit card debts…

The results of your efforts will show up as an increase in your overall credit scores. As your scores go up, you’ll have more clout with your creditors. Call them again and ask for those interest rate reductions on the accounts you have remaining. Folks with the highest scores, get the most benefits…so use that to your advantage! Don’t be afraid to call every other month or so and ask for a rate reduction. What’s the worst that can happen? They say no???? No big deal….you’re not in any worse position than you were before you called. If their answer bothers you, you can boycott them after your account is paid off…..that’ll show ‘em!

Don’t close your accounts after they’re paid off…

Remember, it’s not wise to close accounts that have zero balances, unless you can’t trust yourself to leave the card alone or at one point you got “credit happy” and have way too many open accounts. (You know like… Old Navy, Kohls, Mervyns, Sears, Macys, Target…those cards you got because you got an extra 15% off?)
If you do have too many, and know you really should get rid of some of them, close the most recently opened account first, and the second most recently opened account next…and so forth.

Your credit scores like a long credit history and positive, open, active accounts contribute to that history. Just charge $20 on the card every 3 months or so to keep it active and reporting to the credit bureaus. Then PAY IT OFF when the statement comes in. Do this, and you’ll be on your way to an 850 FICO credit score in no time!

For more information on Increasing Your Credit Score:
http://RepairCreditTrauma.com