Credit score myths

Credit card companies say it takes 60 days for a change (such as paying off your credit cards) to show up on your credit report/score, but who wants to wait 2 months before buying a car? One of our visitors filed a request for investigation of her report stating that the balances on these cards were incorrect, and the investigator looks up your correct balances and changes it. She checked 2 weeks later and it was changed. Also, by paying off 2 credit cards from 70% max credit level down to 0%, increased her credit score 100 points. That's the difference between paying 6% APR for a car loan and 21%.

Credit score myths: "I've never missed a payment. My credit score must be high!"
This could not be more wrong. Many people get upset when they get their credit score and find out just how low their credit score is. Sure paying on time is one of the best things for your FICO score, but it's only one of over 100 variables making up your credit score. Having many open accounts does just as much damage to your credit score, as there is potential for you to run up your credit limit on all your accounts. People with good credit tend to have too much credit, and too many old accounts that they no longer use. Lenders view that as a risk. When I got my score it was ok, but needed improving by closing half a dozen computer store and department store cards which I no longer use, but they were dragging down my score.

A high credit score does not guarantee your car loan approval
Lenders verify if you have had an auto loan before. If not, even with a high credit score, you may end up paying a higher APR, or you can get rejected. You can have a high score and if your current debt load is high, they might reject you.

How to increase your chances on getting approval on a car loan

• If you're a recent college grad, don't apply until you're at your new job at least 6 months.
• Don't apply if you have moved in the last 6 months. Lenders hate nomads and most verify address and income.
• A previous car loan or home mortgage on your record helps.
• Pay off your credit card balances as low as possible.
• Have a reasonably stable occupation like engineer, architect, finance, etc. No self employment.
• Other examples of credit extended to you should appear on your credit report.
• Don't apply for a car loan for at least 3 years after a bankruptcy.
• Don't keep a high debt load or credit card balances.
• No charge off's on your credit report.