Written by Mark Hergert
Published on 21 August 2013 Hits: 5389
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Anatomy of a Credit Score

The Car Loan Process..

Your credit score, also known as a FICO® score, is a number that reflects your credit worthiness at a given point in time. It is the key to your financial life and is used by mortgage lenders, car loan lenders, credit card companies, landlords, cell-phone companies, and even prospective employers to size whether you are a good or bad credit risk.

 

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Your credit score (FIG) determines the type of auto loan rates you qualify for at any bank, merging credit or financial institution. We offer tips, tools, strategies and solutions for resources to later improve your credit score (FICO) before purchasing the car. We offer user-friendly tools to improve credit, both for the do-it-yourself and those seeking a stress-free experience rebuilding credit.

Whether you are a Prime, sub prime, or high-risk borrower, knowing your score (FICO) will help you negotiate the best interest rate on the loan. Each level of the borrower (first, sub-prime and high risk) has a range of interest he or she is qualified for based on their credit. To know what the interest rates you qualify for all will help you approach a dealer with confidence, because you will have realistic expectations on your current financial situation.

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FICO or Fair Isaac Co. in San Rafael, California was founded in 1956 by Bill Fair and Earl Isaac. These two gentlemen were pioneers in the field of credit scoring for financial companies. The company has developed system software that the credit agency and most lenders use to calculate your credit score, also known as FICO.  FICO uses a three-digit rating that helps determine the risks lenders would take to loan money.

The FICO scoring system uses 5 pieces of information: payment history (35%), the amounts due (30%), length of credit history (15%), the new credit (10%) and types of credit. It uses this data to generate a three-digit scores (300-950). Scores of 750 or higher are considered excellent and qualify for the minimum (best) interest. Scores below 619 are considered poor and qualify for the highest (worse) interest rate that can prevent you from qualifying for any type of loan. Auto Credit Financial offers solutions to customers, the scores of trying to establish credit, rebuild or improve.

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After years of delays, the credit industry finally agreed to give consumers access to their personal "credit scores." This is important, because lenders use credit scores to determine who to give credit to and at what rates. Knowing your credit score can be empowering,If it's low you can take steps to improve your credit worthiness and if it's high you may be able to use it as leverage when shopping for your next car loan.