Why You Should Review Your Credit Reports Before Getting a Car Loan
If you are getting ready to buy a new car, you'll probably need to get a loan to take the car off the lot. To best position position yourself of a good loan and low interest, you should check your credit reports and make sure it is ready. 9You can get your free copies here.) Here are three great reasons to check your credit report before you shop.
#1 Find Errors That Can Cause Credit Denials
We talk to people all the time who have had a bad experience when they've tried to purchase a new vehicle. They went to the car dealer, totally expecting to leave with their new truck or car. But when they got to the credit manager - nope. Instead of a loan, they got a denial because of inaccuracies in their credit report. The worst time to find out about errors on your credit report is when you are at the dealer, shopping for a car.
Many kinds of inaccuracies are commonplace, and can arise from errors by the credit bureaus, as well as creditors. These errors can include,
- Fraudulent accounts and inquiries from identity theft,
- Someone else's credit on your report,
- Accounts where you are only an authorized user,
- Mortgages that have been resolved by a short sale, but marked as a foreclosures,
- Previously paid or discharged accounts.
You can avoid an unpleasant surprise like this by reviewing your credit report before going to the car dealer and correcting any errors. If you find items on your report to fix, watch our YouTube video to see how to do it.
#2 Know What Kind of Car Loan & Interest You Could Qualify For
There are loads of great salespeople and finance managers in car sales. But, mixed in, there can be some that aren't so honest or interested in treating you fairly.
One of the things we hear is that the salesman tells buyers they can only get a high-interest loan because of their credit. But the car dealers rarely show buyers never their own credit reports before offering credit. And many of those dealers lie to consumers not only about their credit score, but also the kind of credit that those consumers can qualify for.
Be sure to check your credit before you shop and the type of credit that you can qualify for at a bank. Not only will you have the information you need to negotiate with the dealer, you may also find that you don't need to finance your vehicle at the dealership. In fact, most people find that they can get better car loan rates at a bank or credit union than they can at the dealer. With a copy of your accurate credit report and score, you'll have a better idea of what kind of interest rate you should be paying.
#3 Collections Can Wreck Your Chances of a Car Loan
Before you shop, make sure you don't have any collections on your credit report. Most of the time, if there are collections on your credit you will only be approved for subprime loans at high interest rates. In some cases, collection accounts on your report can cause an outright denial of credit.
By clearing up old collection accounts, you can set yourself up for a better rate, and avoid an embarrassing credit denial in the dealership.
Know When You Can Shop for a Car Loan & Get It
When you know that your credit report is accurate and what you qualify for, you are in a better position to negotiate a loan with the car dealer. Take these steps to get ready to apply for your loan.
- Review your report thoroughly.
- Get all inaccuracies removed.
- Clear up old collection accounts.
- Shop for a loan before visiting the dealer.
Knowing that your credit is clear of errors and what rates are available for a person with your credit history is the first step to making sure you are not being overcharged for a car loan. This information will protect you from salesmen and finance managers who might try to convince you that favorable terms aren't available. If you have already cleared your reports and found a bank willing to lend you money on favorable terms, you will be ready to push back against the dealer's high pressure tactics.
What Additional Resources Are Available?
- Want to see a list of the credit bureaus who keep data on you? Check out our Credit Bureau List.
- If you need help deciding which reports you need, you can read our article on Credit Reports to Order.
- Need help getting your credit report, see our article on How to Get Your Credit Report.
You may have a case under the Fair Credit Reporting Act if you notice the following things on your background report:
- Fraudulent identity theft accounts on your credit credit report.
- Someone else's Information on your credit report.
- Paid accounts still showing a balance due.
- Reporting your accounts in good standing as charged off or in collections.
- Discharged debts still reporting as owed.
- Paid tax lies showing as still owed.
- Derogatory accounts more than 7 years old still on your report.
- Previously deleted accounts that have been reinserted on your report.
- Duplicate reporting of the same account.
If you would like help with one of these problems, call (888) 400-CREDIT | (888) 400-2733 or contact us through this site.
How Much Are Your Fees?
We only charge a fee if we are able to recover for you, and The Fair Credit Reporting Act requires the other side to pay your attorney's fees if you win. You pay nothing up front and we take our fee from the other side.
Follow Up and Monitoring
After your case is done, we will help you to regularly check and monitor your background checks with free annual reviews of your background checks and credit reports to insure that you stay free of false conviction information.
Work with a Credit Report Attorney
If you have been the subject of an inaccurate credit report, you may have be able to seek a correction and compensation for any harm. Our firm can help. For more than 25 years, the attorneys of Lyngklip & Associates have represented victims of bogus credit reports credit reports and been a resource for Michigan consumers who need the help of an experienced lawyer.
To learn more or to schedule a free initial consultation with a credit report lawyer, contact our law firm today or call (888) 400-CREDIT | (888) 400-2733 or contact us through this site. In Michigan, you can reach our office at (248) 208-8864.