Tag Archives: Experian

3 Credit Myths Debunked

Posted on by
Reply

ID-10088178

The hardest problem for anyone looking to purchase a vehicle is knowing where to start. It typically begins long before stepping foot in the dealership. One of the most difficult things to understand is credit. There are many myths that are thought of concerning credit. With the help of a piece on UsNews, though, we’ll try to break down some of those myths to make the process a little easier.

The first myth is only having one credit score. It certainly would be nice if that was true. Having only one credit score to worry about would make things much easier. However, the sad truth of reality is that it is more complicated than that.

A person’s credit score is based on the credit report between the three credit bureaus- Experian, Equifax, and TransUnion. Each of these bureaus uses different methods of determining credit scores to complicate the matter even more. Other various credit scoring models also have an impact, each one using slightly different modeling than the next.

The danger of this myth, according to Us News, is that you can be scared into paying for unnecessary services. You may subscribe to credit monitoring programs that do not give you the information you really need. What you see is not necessarily what the creditors see. Be wary of paying for information concerning your credit score.

The second myth is having a balance in order to have a good credit score. The balance that is reported to the bureaus tends to be the previous statement’s balance. The bad implication believing in this myth may have is that you may be keeping on unnecessary debt by not paying off bills in order to have a higher balance. Don’t let yourself fall behind in order to buy into this myth.

The final myth is one that should definitely be challenged. The idea that the credit bureaus are always right. This couldn’t be a more wrong idea to believe. It would be a magical and great world if it were the case, but as many can attribute, it simply isn’t. According to the Federal Trade Commission, one in five people have errors on at least one of the major three credit reports.

Thinking the reports are accurate encourage complacency. It means doing nothing when action should be taken. Having a lower credit score than you could have is going to hinder approvals and interest rates. Knowing what is on a credit report can be the difference of thousands of dollars.

As Us News says, and we agree, it is not fun but it is necessary to scan through credit reports to find and dispute any and all errors. It is tedious, it is annoying, but it the reward is plentiful. Having healthy credit is important and everything should be done in order to achieve it.

If you have any more questions regarding credit issues or are looking to start the process in getting approval for an auto loan, contact us at Bayside Chrysler Jeep Dodge. Be sure to like us on Facebook and to follow us on Twitter.

Building Good Credit at Any Age

Posted on by
Reply

ID-10086809Getting that golden FICO credit score of 750 to 850 is difficult at any age, but for consumers that start later in life, it can seem impossible or even pointless to try. The truth is that working for a better credit score is beneficial, no matter how old or young you are.

Many consumers mistakenly believe that after a certain age, they really don’t need to worry about their credit. They have paid off their mortgage and car loan, and they either don’t have credit cards or closed their credit card accounts long ago. What reason would they need to take out a loan or need access to credit anyways?

Unfortunately, this kind of thinking usually leads to disastrous inaction. There are many reasons why a consumer could need a loan or available credit, and to get a loan, consumers need a good credit history and by extension, a good credit score. A medical emergency, sickness in the family, temporary job loss, or another unforeseen emergency can happen to anyone. Even if none of these circumstances occur, most people want to travel in their retirement or rent out a condo in a warmer climate. Travel credit cards will require a good or excellent credit score, and renting a condo will usually require a credit check.

There are a few ways that consumers at any age can ensure a solid credit score. First, do not close old credit card accounts. As long as these accounts are open and active, they will report to Equifax, Experian, and TransUnion. Closing these accounts shortens a credit history and lowers the amount of available credit. This raises the overall credit utilization and lowers the FICO score. Second, pay all loans and lines of credit on time and keep the balances low. Payment history makes up a huge part of a credit score, so consumers who pay on time will benefit while consumers who miss payments will end up with a lower score. Finally, consumers who don’t have many accounts on their credit report can boost their score by opening a new line of credit, like an auto loan, and making their payments on time. This action will also diversify the type of credit on the report.

Obtaining an auto loan without a credit history or troubled credit history is tough, but it is achievable. Contact a sales person at Bayside Chrysler Jeep Dodge and find a time to come in so we can work with you to find the proper loan. We’ll get you driving away in the new or pre-owned vehicle best suited for your lifestyle. Be sure to like us on Facebook and to follow us on Twitter to see our monthly specials.

Image courtesy of adamr / FreeDigitalPhotos.net

Getting a Top Credit Score in 4 Simple Steps

Posted on by
Reply

ID-100172171A recent article from US News & World Report points to four common habits of consumers with FICO credit scores of 785 or higher, the top bracket of credit scores. What set these consumers apart from the rest? Read on to find out.

First, these consumers did not miss their payment due dates. 35 percent of an overall credit score is based on payment history, and after missing a payment, a consumer’s credit score will automatically drop. Making payments on time is one of the quickest and most substantial ways to improve a credit score.

Second, they try to keep credit card balances below 20 percent or 10 percent if possible. The key is to keep the card active while maintaining a low credit utilization across the board. Consumers who are maxing out all of their credit cards appear riskier to banks and lending institutions.

Third, they do not close old credit card accounts. Credit scores are partially calculated based on how long a consumer has been utilizing credit, and if the credit card account is closed, the card will stop reporting to the credit bureaus. For example, let’s say that Jill has a credit card that has been active for 18 years, a car loan that she has been paying for 1 year, and a store credit card that she just opened a few months ago. If she closes her credit card account, her credit report will state that her credit history only goes back 1 year to when she got her car loan, and her overall score will suffer tremendously.

Fourth, they do not apply for a lot of new credit in a short amount of time. These consumers aren’t afraid to diversify the type of credit on their report, but they also are not applying for every credit card offer that arrives in the mail. Applying for a lot of credit cards or loans in only a few months is a red flag to lenders, and it can hurt a consumer’s credit score.

How are you doing on these four habits? 2 out of 4? 3 out of 4? Leave a comment below, and let us know.

Obtaining an auto loan without a credit history is tough, but it is achievable. Contact a sales person at Bayside Chrysler Jeep Dodge and find a time to come in so we can work with you to find the proper loan. We’ll get you driving away in the new or pre-owned vehicle best suited for your lifestyle. Be sure to like us on Facebook and to follow us on Twitter to see our monthly specials.

Image courtesy of stockimages / FreeDigitalPhotos.net