Auto Financing Tips

Credit Check
Before you consider shopping for a new car loan, know your credit history. Be sure your credit score is in good standing so financial companies will be able to offer you the best auto loans they have available.

Budget Yourself
Check your finances and have a budget of what you can afford for a monthly payment before you start filling out applications for a new car loan.

Maximize the Plan
Always think of the big picture when looking at a new auto loan. Some prefer a bigger payment in a shorter amount of time. While others prefer a smaller payment in a longer time span. You never know what the future will bring and if your car payment is too big to handle, then you may risk loosing the car.

Check the New Auto Loan
Before you go signing off on a new auto plan, read through it carefully for any hidden fees or penalties you may incure while paying off the loan. Definetly make sure there is no penalty for an early payoff of the loan.

Fico Score/Credit Tiers
A fico score takes several factors into consideration, not just one or two, and depends on the overall picture. So its impossible to say exactly which factor is most important. But here is a general description, for the general population, of how your fico score is calculated and it gives you an idea of how you may raise your score.

Highest: 720 - 850 700 - 719 675 - 699 620 - 674 560 - 619 500 - 559 Lowest: 300 - 499

FICO Definitions
Payment History: Account payment history on accounts like credit card and store credit card accounts, installment loans of any kind (especially car loans and home loans), etc.  They look for negative history as well such as suits, liens, judgements, garnishments, and collection items.  The consider the length of delinquency, the time since items were past due (has it been recently or years ago), and how many past due items.

Amounts Owed: They look at specific loan balances, and in some cases the lack of a specific type of balance.  The number of accounts with balances.  How much of a credit line has been used and how much is still available.

Length of Credit History: This is the time since accounts were opened.  They also look at how many years of credit history has been established and for what type of accounts.

New Credit: Number of recently opened accounts and type of accounts.  Also the number of recent inquiries and the amount of time since the inquiries.  Re-establishment of positive credit history following the past payment problems.