Understanding your Credit Score

Get the latest Scoop on FICO Credit Scores.

what is FICO?

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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Keeping Your Credit Clean

Keeping your credit clean is a matter of due diligence and you should make it a priority to give yourself a "credit checkup" every year, much like you would make it a priority to get a medical or dental checkup.

Even if you don't think you have credit problems, you should get copies of your credit report. You can get them from TransUnion, Equifax, and Experian. Check these to make sure everything on there is correct. If you find errors on your credit report, clear these up immediately.

If you apply for a credit card or loan, then you can get all 3-credit reports for free. Additionally, if you receive a letter that denies you credit, make a copy of it and enclose it with your written request for a copy of your credit report.

Most debts that are over 7 years old may not appear on your credit report.  If this is the case, don't open up old wounds by going looking for them! Many creditors after 7 years of having no contact will write off the debt. In some cases they will continue their efforts to locate you.  Either way, don't open Pandora's box if the debt isn't listed on your credit report.

Be aware that when you apply for a loan or any type of credit, the lenders will request copies of your credit report.  This will add points to your credit score and this inquiry stays on your report for about 3 years.

Nowadays almost everyone will check your credit report so if you're buying a car, do not allow the sales person to check your credit until you know this is what you want.

Keep tabs on your credit report periodically and if you notice charges on your report that appear suspicious, contact the three credit bureaus immediately.

When you do have credit card bills or loans, try to pay them off in full.  If you don't have the money to pay the bill in full, make sure you pay as much as you can (at least the minimum on the bill to avoid bad credit reports). Also, if you have any debts that have not yet gone to collection, find a solution for getting those bills up to date before you get a bad mark on your credit.

If you do get into trouble with your credit, you might want to find someone that you trust who can help guide you through the process of repairing your credit. If you don't know someone personally, try finding a Debt Counselor that is qualified to assist you.

No matter whether you clear your debt yourself or use professional help, one good way to get started is with budgeting.

Come up with a budget that includes your monthly installments. Then make another budget that comes as close to your debts as you can. Finally make a budget that satisfies your demands for survival after you have cut back funds.

If you come up with ways to save money by cutting back, finding some ways to earn more money, and having a budget then you will have a guaranteed strategy for getting yourself out of debt. Plus once you are out of debt you will also notice an increase in your income.

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