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      April 21, 2018

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How Your Auto Loan Can Be Affected By Your Credit Rating

Our lives are dominated by numbers. As students, grade-point averages were the numbers which ruled our lives. In the working world, the success or failure of any business is determined by the financial bottom line are you in the red or the black? As individuals, numbers fill our lives, too. What is our bank account balance? What is the interest rate on our loans and credit cards? All of these numbers, when put together, can affect everything we do.

Take, for example, a very important number: credit rating.

A credit rating is part of your credit portfolio. Every financial decision a person has ever made, from their first credit card to their student loans, are part of the report. Any missed payments a person has ever had also are part of the report and can have a negative effect on any future financial dealings.

There are three credit reporting agencies in the United States: Equifax, Experian and TransUnion. These companies collect financial data on individuals, and then use a mathematical algorithm formula, developed by FICO, to generate a number between 300 and 850. A high, three-digit credit score indicates the person is of solid financial standing and is considered low-risk. Individuals who have credit ratings under 500 are considered high risk for loans and other financial dealings.

FICO also groups lenders together based on their overall financial history. Lenders who occasionally get behind on their bills are classified in a separate category from chronic late-payers. Prior to 2009, anyone who failed to pay on any loan whether it was an occasional issue or a chronic one was lumped together by FICO, creating an unfair credit rating for some individuals. With the changes, it helps those who have fallen behind a few times to still be able to achieve fair dealings with creditors.

However, for those chronic late payers, one of the areas which can be affected by a poor credit rating is an auto loan.

Unless you are lucky enough to have enough savings to pay cash for a vehicle and most people do not then chances are you will need to take out a loan to finance it. The new way FICO calculates its credit scores has a tremendous impact on the auto loan industry. People with only one major credit account in delinquency are likely to still have a good chance to get a fair interest rate on a loan. However, borrowers with a history of delinquent accounts will find themselves being either completely denied for a loan, or saddled with an extremely high interest rate.

A FICO score of 720-850 guarantees an annual percentage rate of no more than 6.3 percent, while those in the bottom tier of 500-589 can expect an interest rate as high as 18.5 percent. Borrowers whose credit score falls below 500 will likely be denied any kind of auto loan, even one with an extremely-high interest rate.

If you are in the market for an auto loan, the best course of action is to request your credit report and a copy of your credit score so you are aware of whether you may have difficulty in obtaining a loan. Individuals are permitted one free credit report from each of the three credit-reporting agencies annually. However, credit scores are not included and must be purchased separately.

Wells Fargo to pay $1 billion in regulatory settlement over abuses in its auto and mortgage loan units

Wells Fargo shares rise after the bank agrees to pay $1 billion to settle allegations from multiple regulators it engaged in lending abuses. Wells says the settlement with the Consumer Financial Protection Bureau and the Office of the Comptroller of the ...

Published:  Fri, 20 Apr 2018 14:45:00 GMT



Wells Fargo Fined $1 Billion Over Mortgage And Auto Loans

Wells Fargo will pay a $1 billion fine to settle claims that it had taken advantage of mortgage and auto loan customers. Federal regulators also said the bank did not have adequate compliance or risk management programs.

Published:  Fri, 20 Apr 2018 13:20:00 GMT



Wells Fargo to pay $1 billion over home and car loan abuses

NEW YORK - Wells Fargo will pay $1 billion to federal regulators to settle charges tied to misconduct at its mortgage and auto lending business, the latest punishment levied against the banking giant for widespread customer abuses. In a settlement ...

Published:  Fri, 20 Apr 2018 07:00:00 GMT



Wells Fargo fined $1 billion by regulators to settle auto-loan, mortgage abuses

Wells Fargo fined $1 billion by regulators to settle auto-loan, mortgage abuses The bank agreed to a $1 billion settlement with federal regulators related to auto-loan and mortgage practices that harmed customers. Check out this story on azcentral.com ...

Published:  Fri, 20 Apr 2018 09:25:00 GMT



US fines Wells Fargo $1 bn for mortgage, auto loan violations

New York (AFP) - Wells Fargo agreed Friday to pay $1 billion in fines over US allegations of bank misconduct that damaged consumers -- the largest such penalty so far under the administration of President Donald Trump, who has lambasted the scandal-hit bank.

Published:  Fri, 20 Apr 2018 10:10:00 GMT



GOP Readies to Kill CFPB's Auto-Loan Rule Using Newly Expanded Tool

WASHINGTON-Republicans in Congress moved closer to undoing an Obama-era regulation designed to prevent racial discrimination for auto loans, using a newly expanded legislative tool that could allow them to change a range of government rules in place for ...

Published:  Tue, 17 Apr 2018 18:15:00 GMT



Feds fine Wells Fargo $1 billion for auto loan, mortgage abuses

NEW YORK (AP) - Wells Fargo will pay $1 billion to federal regulators to settle charges tied to its mortgage and auto lending business, the latest chapter in a wide-ranging scandal at the banking giant. However, it appears that none of the $1 billion ...

Published:  Fri, 20 Apr 2018 06:18:00 GMT



Wells Fargo Hit With $1 Billion In Fines Over Home And Auto Loan Abuses

The Consumer Financial Protection Bureau is levying a $1 billion fine against Wells Fargo - a record for the agency - as punishment for the banking giant's actions in its mortgage and auto loan businesses. Wells Fargo's "conduct caused and was likely ...

Published:  Fri, 20 Apr 2018 06:12:00 GMT



New-car shoppers: Brace yourselves for higher costs

A combination of higher auto prices, longer loans and climbing interest rates means a buyer who finances their purchase could pay about $6,500 more than they would have five years ago, according to research from Edmunds.com. "This is pretty much across the ...

Published:  Fri, 20 Apr 2018 15:30:00 GMT



Wells Fargo hit with $1 billion fine for auto loan and mortgage abuses

NEW YORK (AP) -- Wells Fargo hit with $1 billion fine for auto loan and mortgage abuses.

Published:  Fri, 20 Apr 2018 06:22:00 GMT



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