This is the first in a series of monthly educational videos by Grainger Nissan of Anderson.
Buying a new vehicle is a significant purchase for most people, and one that is best made when you have a solid credit score.
In addition to knowing the color and features of the vehicle you’re ready to purchase, you should also know your credit score, says Mike Sadlock of Grainger Nissan of Anderson. In this video, Sadlock explores questions about credit worthiness when purchasing a vehicle.
What is the difference in credit scores?
There are different types of credit scores, such as FICO and Vantage Score, and understanding the difference is important, Sadlock says. For example, FICO is used by 90 percent of all lenders so checking your FICO score before going to the dealership is recommended.
What are the credit bureaus?
Lenders also use different credit bureaus, because all consumer accounts make not appear on a single one, Sadlock says. Grainger checks with all three credit bureaus –Equifax, TransUnion and Experian –based on which bank will be used for financing.
Do credit inquiries hurt my credit score?
Inquiries can impact your credit score, however not all inquiries are equal. With FICO, for example, multiple inquiries regarding auto, mortgage or student loans don’t impact your credit score in the same way that multiple inquiries for a credit card would.
“FICO knows that if you’re shopping for a mortgage or student loan or auto, that you’re going to shop for the best rate so within a 30-day window, they’re basically counting those inquiries as a single inquiry.”
What goes into a credit score?
The amount you owe, how long credit has been open and credit card balances in relation to the limit all are considered in your credit score. Pay history and inquires also impact scores. Credit scores range from 350 to 850, depending on the bureau.
“We have banks that work with 800 credit scores and banks that work with 300 to 400 scores,” Sadlock said. “Banks look at other factors like the equity in the deal – are you putting money down or do you have a paid-for trade. But your credit score does factor in.”
Sadlock recommends that you check your credit scores and know your buying power before walking in the dealership, especially your FICO score. AnnualCreditScore.com, a website jointly operated by the three major U.S. credit reporting agencies, is a good place to check your FICO score.
Where can you learn more about credit scores?
Equifax, Experion and TransUnion all have consumer education pages on their websites where you can learn more about credit scores. MyFICO.com and VantageScore.com also have information on their website about their scoring systems.
Consumers also can get a free annual credit report at AnnualCreditReport.com.
Should I use a credit repair service?
Most credit repair services are fixing errors, making updates or changes or contesting faulty information on consumer credit reports, something individual consumers can do on their own through the credit bureaus.
“It’s a matter of whether you want to spend the time to do that yourself or pay somebody to do that for you,” Sadlock said.
Grainger Nissan of Anderson, 3510 Clemson Boulevard, Anderson SC 29621 (864) 324-0650.
