What's on your credit report

Credit Unions:
If you're a corporate employee, school district, government agency, college, etc., you probably have a credit union. Credit unions are easier on you than banks, they'll lend you more money at favorable rates, usually 2% better, but not as good as the car loan sites. Your credit union can approve you over the phone in minutes, printing your credit report during the call. They'll tell you what you qualify for. I have found more often than not, the online lenders rates usually beat the credit unions.

Remember, get a copy of your credit report so there's no surprises. They can deduct payments from your pay check if you desire. Credit unions also give more favorable benefits than leasing companies. Most don't require a security deposit, down payment, other fees, and are generous with mileage. If you use a credit union, make sure there is no fine print that says they can put a lien on your home if you default on the car loan. The Postal Service credit union has this lien.

Bad Credit Causes You To Pay More For Insurance
Many insurance companies run credit checks on you before the application is signed. Some online companies bypass this by allowing you to supply a self reported credit rating from a pull down menu. The reason for the credit checks is that there is a higher underwriting risk not only in terms your ability to make payments and keep policies in force, but the higher claims/loss ratios of folks with bad credit. A 40 year old man with a couple of late payments and no tickets, accidents or major violations might very well qualify for a preferred policy.

What's on your credit report
Some sites give you your credit report free, but you must sign up to their credit monitoring service to get it. You are allowed one free copy of your credit report by a creditor who rejects you, otherwise it's $7.95 from most sites. Your credit report appears online, and shows who has checked your credit history too. You'll see many inquiries with no credit issued and this hurts your chances of qualifying. You must have all these unauthorized inquiries removed from your credit report, especially from car dealers who checked your credit while you were out on a test drive. See our review of Fresh Start below, that tells you how to do this. Usually credit bureaus want to know your address, previous address, SS#, employer, the usual, to get your credit report. Many errors can be quickly removed with a phone call to your creditor. You MUST have a copy of your credit report if you've never seen it before. Show up at a dealer before obtaining your credit report, and you are in big trouble. You might as well just give them your checkbook. A car dealer should never know more about your finances than you do, and besides, you might find an error in your report. This puts you at a disadvantage when the dealer calls 2 weeks after the sale to say "financing fell through, we need more cash" and they blame some black mark on your credit history.

Extended Warranties
As with financing, you must shop for extended warranties before you buy your car so you can compare with the dealer's warranty pricing. For extended an warranty, try Warranty Direct. I Review both of them in detail in the section on How To Buy An Extended Warranty And Avoid Scams. You want to get an online warranty quote before you go to the dealer, so you'll have something to compare the dealer's extended warranty price with. Never show up at a dealer to buy a car without a free quote from an online warranty site.