Bambooclat dot com Money, affiliate marketing and the Rat Race

I think that most people will agree that it is important that one understands the car buying process and how credit rating affects interest rates and the overall car buying experience before one goes to the dealership.

First, the car buyer should know that banks, lenders, insurers and car dealerships regard a credit rating or credit score as a reasonably accurate indicator of future consumption behavior. While insurance companies relate credit scores to the probability of claims being filed, lenders, on the other hand, use the rating as an indicator of potential defaults.

Low credit ratings, therefore, translate to tougher loan terms and higher insurance premiums. That is why it is recommended that car buyers check their credit report for discrepancies in their credit history. They can find out by contacting any one of the three credit bureaus — Equifax, Experian or TransUnion.

Credit ratings are expressed in a numerical range from 350 to 850 which gives an indication of the consumer’s bill paying habits. To a lender the score indicates the level of risk that the lender will undergo by granting a loan to the consumer. High scores mean consumers are likely to be more trustworthy and have a higher tendency to pay their bills on time.

The use of credit ratings to factor out car loan terms is not always reliable, but this is the norm in the industry. Fortunately, there are always ways to improve your credit rating and obtain good terms on your loan. Companies like cardownloan.com has a system that helps buyers locate banks and car dealerships that are willing to work with people with little or no credit.

Consumers with little credit that are not ready to buy a car can improve on their credit by paying their bills on time, reducing the amount of credit account that they open, prevent the possibility of undergoing collection agency notices, repossessions, foreclosures, tax liens, or bankruptcies, and avert from having increases in credit card balances or a reduction in credit limits.

It is important to bear in mind that not all financing options are equal or may be perceived to be fear.  Rates vary widely from dealerships, banks and credit unions; rates vary from used cars to new cars and from the length of the loan. For instance, bankingmyway.com 36 months loan for a new car is 6.38% while a used car is 6.9%. For a 60 months loan on a new car the interest rate is 6.55 and 7.04% on a used car.

Categories: cars
Tags: car dealership, car loan, credit rating, credit score