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Author: admin | Category: Loan For Car | Date: 03.12.2013

A good or bad credit score can affect every facet of an individual’s or family’s financial life, from mortgage rates and auto loans to employer background checks and life insurance rates.
Generally speaking, a good credit score is anything above 720; however, different credit bureaus use different formulas and statistics to calculate scores so it is common for an individual to have a different score with each credit reporting agency.
Unless you are extremely wealthy and can act as your own bank, you will need to maintain a good credit history, or learn how to improve your score, in order to borrow money for major purchases, such as a home, car, or even your child’s education.
Credit scores above 800 are excellent and people in this range pay the lowest interest rates and are likely to qualify for additional credit. As mentioned earlier, different reporting agencies and bureaus, as well as lenders and banks rank each credit rating differently. Credit bureaus base scores on three major types of credit: secured debt, unsecured debt and revolving credit, as well as many additional factors. Since the bureaus base scores on payment history and length of credit history, it is necessary to actually carry non-credit card debt and make regular payments for at least one year. If you are a teenager, high school or college student, start with a credit card tied to your parent’s account. Lastly, if you have no credit history, but are a recent graduate with a job offer or are currently employed, most any credit card company will be happy to have you. People with the best credit scores pay the lowest interest rates on loans for cars or homes, are eligible for special considerations like full financing on new cars or high credit limits on cards.
Your rating will never be the only factor taken into consideration when applying for a loan. It may be possible to overcome the 6-month job requirement if the change in employer resulted in a substantial increase in income. When it comes to credit scores, lenders use general guidelines that are not entirely based on whether you have good credit or not.
Young borrowers have a shorter history and consequently lower scores, so lenders may consider an applicant’s age, current income, education, place of employment, and payment history on rent, utilities, student loans and cable or cell phone service.
While some people prefer to pay in cash, there are some things that may cost more than most people can pay in a lump sum, like a house or a car.
Reporting agencies are required by law to supply an individual with a copy of their report on request. Credit scores are more than just numbers; they reflect how lenders, banks, credit card companies, landlords and employers see individuals who are potential business associates.
Many lenders consider 620 to 640 as the dividing line and once you fall below that mark, you will probably be required to pledge additional collateral and a shorter terms will be mandatory. Of course, while earning a 680 wasn’t all that difficult before the recession, the new good-credit bar of 720 is harder to reach. For someone on the cusp, the differences could be as small as one extra credit inquiry — like when a lender looks up your credit score before approving you for a loan, or if a prospective employer pulls your credit report without telling the credit bureaus it’s strictly for employment reasons.
If you are interested in learning how to finance a car after bankruptcy, you have come to the right place. Susan and her husband thought they were doing everything right, until their daughter got sick and insurance didn’t cover her surgery and hospital bills. There are circumstances that may leave you looking for a car shortly after filing for a discharge of your debts.
Where this may be a little more difficult because of your new, lower credit score and having a bankruptcy on your credit report, it may still be possible. The sooner you begin to reestablish your credit the quicker you can get back on your feet and rebuild your life.
Contact Sub-Prime Lenders: Sub-prime lenders are vendors who are willing to loan money for those asking how to finance a car after bankruptcy. Another reason these lenders are able to do this is that if you should default they do have the choice of repossessing the vehicle.
These lenders may bid for your business and this could mean a chance at getting the best possible interest. This may require a little more time on your part by simply doing a search to find a bank that will present you with a loan. You will more likely have the ability to explain your situation because an auto consultant works for you.
After getting your car loan you may want to apply for a secured credit card to help rebuild your credit even more. Jason Shares His Exerience…I filed bankruptcy a few years ago and have a repossession on my record, however that did not stop Mike from getting my wife and I into a car. Chapter 13 bankruptcy car loans are available to those who find themselves in need of a different vehicle after restructuring their debts. When someone files a chapter 13 bankruptcy they are agreeing to pay off their debts within a 3 to 5 year period.
Typically, you are agreeing to make the regular payments along with an added amount each month to help you get caught up on your debts that may have fallen behind. With this form of bankruptcy, you are able to keep your major purchases such as your home and your car.
If this happens to you, you will need to contact your bankruptcy attorney who works with your court appointed trustee.

In addition, you will be asked for a valid reason and proof for needing a chapter 13 auto loan. To prepare your presentation to the Chapter 13 trustee, you will need to find a dealer or auto consultant who can find realistic terms for a loan. Another point to consider, your current loan will need to be paid off before you can get your next car.
Research an auto consultant dealer that works with specialized situations such as chapter 13 bankruptcy auto loans. An auto consultant may be able to help you more than a regular dealership because they tend to cater more to individual needs, instead of just trying to make a car sale.
Lenders, landlords and even employers consider a credit score a reflection of an individual’s reliability and honesty – correlating an individual’s management of their personal finances to their level of responsibility, integrity, and business or financial skills. These Americans have a long credit history with consistent payments and no run-ins with collection agencies, bankruptcies, liens, or judgments. For instance, Credit Sesame suggests that a figure ranging from 680 to 739 is a GOOD credit score, while anything above 740 is excellent. Unsecured personal loans can be used to buy expensive toys or gifts, consolidate debt, or start a small home business.
For example, if you buy a home with cash, you will not improve your credit score because you never made payments and no reporting agency actually received note of the transaction. As more data is pulled by agencies, new relationships are discovered between varying factors; however, the basic factors you need to focus on to maintain a high score are payment history, balances or amounts owed each month, length of history, new applications for credit, and types used.
Consistently making payments on-time will have a positive effect in the long-term, while a 30, 60, or 90 day late payment will have an immediate negative effect on your score.
If you over leverage your income or consistently use 100% of your limit, you may be penalized. The longer you’ve maintained accounts, consistently used credit, and maintained them in good standing, the more reliable you are.
Many student cards do not actually build credit, but a normal card tied to your parent’s credit card account can start building you a positive history while you are in school. Secured cards are easy to get and the credit card companies make regular reports to bureaus and agencies, helping account holders raise scores quickly. Just make sure to use your card responsibly and start paying off your student loans on a monthly basis, and your record will build.
Employers often pull reports on potential employees and a low score can make a difference in the hiring process. Even if your credit score is over 800, you may be turned down for a loan if you are self-employed, your income is unpredictable (maybe you work on commission?), have been at your current job less than 6 months or if your debt to income ratio is greater than 33 to 38%. Those who are self-employed or own a small business can choose to incorporate their business and become employees of the business receiving a salary, which can make it easier to qualify for credit.
A mortgage lender that requires a 720 may qualify a borrower with a lower score if the person has a substantial down payment. Smart consumers use credit wisely and borrow amounts they can easily repay to establish a good history and score. If there is a difference of more than 30 to 50 points between the scores, a consumer should request a copy of the report from the credit agency.
If you find a discrepancy, call the company that reported it, explain the situation, and have them send a written request explaining the inaccuracy. Establishing and maintaining an excellent credit score is the first step in building wealth and a financially secure future. It meant you paid most of your bills on time and had a solid enough record to get a loan at the best rates. Lenders place borrowers into brackets, which means someone with a score of 719 is lumped into a bracket that starts as low as 690. When Fannie Mae and Freddie Mac were backing mortgages after the crash, they settled on the 720 threshold for the best pricing, says Keith Gumbinger, a vice president at HSH Associates, a mortgage-data tracking firm.
With more people out of work and unable to pay their bills, even consumers with previously envious credit scores might not reach 720. The same thing could happen if you’re suddenly using more of your available credit because you made a big purchase or even if you closed a credit card that had a $0 balance and a large available balance. By taking this route, you can find websites that will allow you to fill in your personal information one time and the sites will present it to several lenders.
Although not every bank or credit union will work with those that have less than perfect credit, some may finance a car loan after bankruptcy. Auto consultants are licensed in the car business and have several resources willing to loan money for a car loan for those that have bad credit. Chapter 13 consolidates all your debts and requires cooperation with your creditors to restructure a new payment plan to pay off your existing debt. Additionally, this type of bankruptcy will do less damage to your credit score versus a chapter 7. However, what happens if your car should start leaving you with heavy repair bills before the 3 to 5 year pay-off plan?
He wants to assure that you stay on the well thought out plan to getting your finances back on track.

You will want to show the trustee that you have found a reasonable interest rate as well as a car that is mechanically sound enough to last the duration of your Chapter 13 repayment term.
So, you will have to be sure that you can either sell your car or trade it in to collect enough for the balance of your current car loan.
An example of secured debt is a mortgage, car or business loan because the loan is secured by collateral or an asset, such as the home, car or business itself, respectively. Typically, large business loans will need to be secured, collateralized, or the borrower will be required to take out a life insurance policy to pay off the lender in case of tragedy.
Consumers who are trying to build the best credit score must carry some debt over time to build a history. Though 30 or 60 day late payments may damage your credit now, if it is isolated event, your scores will only decline temporarily. This is called credit utilization and the best recommendation is to consistently use less than 50% of your card’s limit and then switch to another card. New college graduates may be frustrated that, despite no mistakes or late payments, they don’t have a perfect score.
Bank loans against savings accounts or car loans are also relatively easy to apply for and, provided the payments are made on time, will build a good score over a one to two year period. A high score is seen as a sign that an individual is responsible and honors their obligations. The debt to income ratio is the percentage of monthly income that goes toward paying existing debts, including housing costs. Federally guaranteed mortgage loans, also known as conventional loans, require a minimum credit score of 620, but private lenders have some flexibility in their guidelines.
When these people are ready to buy high ticket items, they can qualify for loans with the most favorable terms and lowest rates.
Follow-up with the credit bureau to ensure it gets inputted into your account and the issue is resolved. So if you are looking for what is considered a good credit score, it’s the number that gets you the lowest interest rates and fees!
Now, borrowers need at least 720 to get the biggest loans or the best terms, including a credit card with the longest 0% APR promotion or a jumbo mortgage. That one measly point could cost more than $600 over the life of an average 36-month car loan, or $2,500 over the life of a 15-year home equity loan, according to Informa Research Services. To get there, a consumer would need low balances on credit cards and a 15-year credit history — but might have missed a couple payments over the last two years. Nor does he want to put your current creditors at risk because you have made a promise to them. Do the preliminary paperwork including the interest rate, monthly payment as well as any other fees you will be charged.
600 to 650 is an average score and individuals in this range pay higher interest rates and have more difficulty getting unsecured debt like credit cards or small bank loans. Personal credit cards like Visa, MasterCard, American Express and Discover are examples of revolving credit, where the lender can continue to borrow, up to card’s limit, while making regular payments against the incurred debt. Late payments have an immediate negative effect, so making payments on time regularly are vital. 90 day late payments are another story – one 90 day late payment may affect your credit for up to 7 years because, to the computer models, it indicates you are likely to repeat the transgression.  In terms of damage, it ranks up there with a bankruptcy filing, tax lien, repossession, or collection against you. This is because a long track record of reliability and financial responsibility is essential to your creditworthiness.
A bad score can even make it difficult to rent housing since many landlords check the credit scores of potential tenants.
Good credit scores also make it possible to borrow money quickly to cover emergencies like auto and home repairs.
For millions of once-desirable consumers with scores between 680 and 720, that 40-point jump could cost thousands of dollars over the life of a typical loan. Because most mortgages are backed by Fannie or Freddie, the major lenders kept the same threshold, and as banks have started to put loans on their books again, it’s stuck. Someone who regularly pays on time could drop from the mid-700s if he applied for several new credit cards recently or if a person carries balances that are more than 30% of their credit line or those who have a short credit history but pay on time.
You will have to convince the trustee that you have a real need for a new vehicle as well as your plans to repay the new car loan. Scores below 600 are considered poor, which means individuals pay the highest interest rates and usually do not qualify for low-APR cards or unsecured loans. If you must carry over a balance from one month to another, try to keep it as low as possible if your credit score is very important to you. I even have a friend who works in the banking industry, and her employment contract stipulates that she maintain a certain minimum credit score at all times. This concept also applies to your mortgage and car loans – do not live beyond your means, especially if you want to avoid being house poor.

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