- Four Myths About Your Credit Score And Auto Loans

When an auto loan provider pulls your credit report auto loan and money, the most important piece of information is your FICO credit score student loan consolidation. The FICO score was created as an estimate of the likelihood of a borrower defaulting on a loan; the higher the score auto loan and money, the lower the chance of default student loan consolidation. The specific formulas used for credit score calculation are kept secret by the credit bureaus auto loan and money, but the FICO concept involve factors such as the time you have had credit established auto loan and money, late payments auto loan and money, and amount of credit used vs student loan consolidation. amount available student loan consolidation.

Over time a lot of myths about credit score have arisen student loan consolidation. To negotiate the best auto loan you need to be able to separate fact from fiction so you know how a lender is going to see you as a potential borrower student loan consolidation.

Myth #1: Credit counseling hurts your score

FICO researchers found no data that suggested people seeking credit counseling were less likely to default on their car loans student loan consolidation. No part of the FICO system references credit counseling so it will not affect your score student loan consolidation.

Some lenders might shy away from a borrower receiving credit counseling auto loan and money, or might offer auto loan quotes that carry higher interest than someone with perfect credit might receive student loan consolidation. Then again auto loan and money, counseling is better than ignoring your credit problems and hoping they will go away student loan consolidation.

Myth #2: Closing accounts improves your score

This is a myth that even many lenders believe auto loan and money, but closing accounts actually lowers your credit score student loan consolidation.

Closing old accounts reduces your credit history auto loan and money, making you appear as a new borrower student loan consolidation. Also auto loan and money, part of the FICO score is the percentage of available credit you are currently using student loan consolidation. Closing accounts reduces available credit but not current debts auto loan and money, so those debts are now a higher percentage of your credit limit making you appear to be living on the edge of your means student loan consolidation.

Myth #3: Checking my credit report hurts my score

Many credit score checks by auto loan providers will hurt your score slightly student loan consolidation. However personal checks on your own credit never hurt your score student loan consolidation.

Even multiple credit score checks by auto loan providers won't hurt your score as much if they occur over a 14-day period student loan consolidation. If you are shopping car loan quotes auto loan and money, do all your inquiries in a short time to minimize the impact on your credit score student loan consolidation.

Myth #4: I need a big income for a good credit score

Income has absolutely no effect on credit score calculation student loan consolidation. Credit rating is not about how much you earn but about your reliability in paying the money you owe student loan consolidation.

An auto loan provider will consider your income to ensure that you are not buying outside your means student loan consolidation.

Myth #5: I have only one credit score

Each of the three credit bureaus calculates their scores separately and auto loan and money, although they are likely to be close auto loan and money, they will vary from agency to agency student loan consolidation. Check your scores from all three agencies before shopping for car loans student loan consolidation.