Car Loan Mistakes #2

Never attempt to make a major purchase (auto, home or home refinance) without knowing your credit score. Never let a salesperson know more about your credit than you do!

While all credit reporting agencies (Equifax, Experian and TransUnion) have their own unique credit scoring system, the one you want is the one most lenders use: FICO. You can obtain your score for $15.95 at http://myfico.com, so you know exactly where you stand, but it also includes use of their Credit Simulator for 30 days. That gives you the opportunity to look at each item in your credit report and see what your options are. For example, with a Sears Card you’ve had a number of years, you can determine if your credit score would go up or down if you pay off the card or close the account. You can go through each item on your credit report and get your credit score in the best possible shape. This allows you to be in charge of the negotiations.

Lastly, the best question to ask the salesperson to show you’re a saavy shopper is: “What is the minimum acceptable FICO score I need for your best rate?”

Give it a try and let me know how you do.