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      April 26, 2019

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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.

Markups on Auto Loan Packages reach record high of $1,791, according to the Outside Financial Markup Index

MIDLOTHIAN, Va., April 24, 2019 /PRNewswire/ -- Outside Financial today released the latest results for the Outside Financial Markup Index, the leading measure of dealership loan markups paid by ...

Published:  Wed, 24 Apr 2019 06:30:00 GMT



Car Loans of America Offering Bad Credit Car Loans to Consumers of All Credit Tiers

Car Loans of America Revamps Its Website by Adding Bad Credit Car Loans to Its Extensive List of Services. LOS ANGELES, April 22, 2019 /PRNewswire/ -- Car Loans of America understands that having ...

Published:  Mon, 22 Apr 2019 06:15:00 GMT



How to Get Someone's Name off a Joint Car Loan

A joint auto loan is when a primary borrower shares a car loan with either a cosigner or a co-borrower. You may have needed a cosigner or co-borrower to get approved, but things change, and you may no ...

Published:  Sun, 21 Apr 2019 06:08:00 GMT



Why your next car loan should be from a credit union

If you're in the market for a new automobile, maybe you think the easiest way to get your dream car financed is to obtain dealer financing at the time you buy the car. In a sense, that's true - as ...

Published:  Fri, 19 Apr 2019 00:45:00 GMT



New car finance market's growth continued in February

Figures from the Finance and Leasing Association (FLA) show that the second month of 2019 saw 48,642 new cars bought on finance agreements such as personal contract purchase (PCP) and personal ...

Published:  Tue, 23 Apr 2019 00:07:00 GMT



Blend, a startup that's building a 'one-tap' mortgage-application tool, is now jumping into the auto-loan market

For the past seven years, the startup Blend has been moving toward an ambitious goal: simplify the mortgage-application process to the point that prospective buyers can find out whether they qualify ...

Published:  Fri, 19 Apr 2019 16:02:00 GMT



How Much Down Payment Do I Need for a Car Loan with Bad Credit in Los Angeles?

When you have bad credit, you typically need to have a down payment in order to get approved for an auto loan, but how much money you need to put down often depends on the type of dealership you go to ...

Published:  Mon, 22 Apr 2019 05:07:00 GMT



Small Business Administration Loans: New Challenges and Changes

We also finance a significant number of properties classified as special purpose. For example, we have financed wineries, car washes, bowling alleys, auto repair shops, gas stations, hotels, assisted ...

Published:  Thu, 25 Apr 2019 10:37:00 GMT



KBRA Releases Research - Auto Loan ABS: Tax Refund Worries Appear Overblown

Kroll Bond Rating Agency (KBRA) releases its Auto Loan ABS: Tax Refund Worries Appear Overblown research report. With tax filing season coming to a close last week, KBRA examines how delays in the ...

Published:  Tue, 23 Apr 2019 04:42:00 GMT



Man loans car to stranger, stranger steals it

The Pueblo Police Department was called to the 700 block of North Santa Fe Avenue at approximately 10:30 a.m. Wednesday to investigate a report of aggravated motor vehicle theft. The victim told ...

Published:  Wed, 24 Apr 2019 19:21:00 GMT



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