Hi. I am a newbie to the site and was hopeing that I could get some opinions from the people here. Some background - I have been thinking about buying a new car within a year or so and have just been looking at what is out there nowdays. Because I knew I would have to finance the car, I signed up for Identity Guard in April 2012 to get an idea of what my credit scores would be. I was shocked in a way, but in a way I wasn't. I bought my first car in 1999 and thought at the time I got a good deal. I was very young at the time and didn't know what I was doing. I bought my 2nd car in 2005 and thought I was in a little bit better situation. Due to some reasons out of my control I know that I had some missed payment, but never more than 30 days. I know now that I ended up hurting my credit, but at the time I wasn't really thinking about the future. So now almost 7 years later, I am trying to make sure that I am not in the same situation that I was in the last 2 times I bought a car. My question - How do I go about making sure that I get the best rate possible without going to multiple people for financing? I have heard that going to your bank would be better than going through the dealership. According to Identity Guard my scores as of July 2012 were as following: Equifax - 644 Experian - 650 Transunion - 658 I know they aren't the best, but they could be worse from what I have been reading from people. I have a Orchard Bank credit card with a $320 limit, Capital One with $500 limit, and a Sears Charge with $2300 limit - bal of $320. I am also an AU on another Sears card with a limit of $1000 and it carries a revolving balance. I pay my 2 cc in full each month even though my balance is more than 10% of my limit. I didn't know about the 10% rule until I started reading the posting this site. Thanks a bunch!
Welcome to Creditnet! Unless a dealer is offering a very low or 0% interest deal and you're still able to negotiate I great price on top of that, I wouldn't finance anything through a dealer. The financing piece is where they try to make a lot of money. Go to a local credit union or your current bank and see what they can offer you. Then, once you have your financing in place, head over to the dealer and negotiate the best price you can on the car too. Also, regarding the Identity Guard scores, it's important to remember that those scores are what we like to call "FAKO" scores because they're not your actual FICO Scores. No lender would actually use them when you apply for something, so don't rely too much on them. Just use them for educational purposes to give you an idea of where your real FICO scores might fall. At this point I would focus on getting your credit utilization ratio down under 10%. Pay off any revolving balances, and this should have the greatest positive effect on your FICO scores in the short run. And hopefully those old late pays should start dropping off your credit reports soon too, which would obviously be a good thing for your credit scores. Depending upon how old they are and what your recent payment history has been like, they may not be hurting your credit scores that much anymore though.
Another way to improve your credit score besides paying down all of your revolving balances down to 10% of your credit limits is to add an authorized user account. You can ask a trusted friend or family member to add you as an authorized user one of their existing credit card accounts. Just make sure the card has perfect payment history and they are able to maintain a low balance (10% or less of the credit limit) at all times. The longer the payment history and the larger the credit limit the bigger the boost in your credit score you will see. Thanks! Heather with BoostMyScore.NET
