Couple of comments....you are entitled to a copy of your credit reports (there are THREE of them: Equifax, Experian and TransUnion) once a year. You should be looking at the information there on a regular basis to make sure that no incorrect information has been reported. It is also one of the best ways to help combat identity theft. You can also get a free copy of your report if you have been turned down for credit. Neither of these inquiries will drop your score.
A few years ago, new software was being offered to mortgage lenders and brokers that would help the credit reporting agencies detect when a consumer was shopping for a mortgage so that your FICO score would not be affected by multiple inquiries during a set period of time, but that only applied to mortgage lender inquiries, and those companies using the new software to place their query. It was an expensive transition, and, truthfully, I didn't keep up to see what happened. But, it was sure a step in the right direction.
When companies, on their own, run your credit to see if they want to make "offers" to you, it does not have the same effect on your credit score as when you are out actively pursuing credit at your own request. Plus, your score does not experience significant damage if you have the occasional inquiry. Repeated inquiries during a short period of time is what makes your score take a hit.
IF you know your FICO scores, you can walk into a car dealership and tell them that you know your scores and want to know the deal they will offer for that score and ask upon which credit reporting agency they base their rates. Your scores can vary a great deal between agencies, or they can be close. It's crazy!
One of the best things you can remember about your credit rating is that you will get hit hard if the ratio between available credit and amount of credit utilized is high...most people say above 40%. AND, you take yet another hit if you have used over 40% of the available credit on any ONE account. It can drop your score as much as 100 points.
Even if you are armed with your credit score when you walk in the door of the dealership, be prepared that they will eventually run your credit before giving you any final offer. However, any good F&I guy can tell you the FICO requirements for the special offers out there, like 0%. The banks fax them rate and term sheets every day. PLUS, the car dealers made LOTS of money on financing, since lenders discount their rates to them. If they want, they can negotiate on rate.
There are companies out there who specialize in lower grade loans, but I don't know much about the current B and C markets for either consumer loans or mortgages at this point. Things have drastically changed recently and they are constantly changing.
If you don't have great credit right now, you have to be very careful and watch all of the fine print. I have a feeling that there are some wide swings in what different companies will offer at this time, depending on their own financial stability.
Great time to buy a car, horrible time for financing, I would think.
Mortgage pre-approvals can mean a great deal if you've used a reputable source. But, they are only as good as the information you provide to the lender. A mortgage broker knows EXACTLY what requirements (on any given day) a lender has for a particular loan/rate. Your credit to debt ratios, credit score, LTV (loan to value) ratio, etc. But, the problem is that you just don't always know who is reputable and who is not and in this market, the lender can change his terms several times a day.
Car pre-approvals depend, too, on the reliability of the source.
Good luck!!!
A few years ago, new software was being offered to mortgage lenders and brokers that would help the credit reporting agencies detect when a consumer was shopping for a mortgage so that your FICO score would not be affected by multiple inquiries during a set period of time, but that only applied to mortgage lender inquiries, and those companies using the new software to place their query. It was an expensive transition, and, truthfully, I didn't keep up to see what happened. But, it was sure a step in the right direction.
When companies, on their own, run your credit to see if they want to make "offers" to you, it does not have the same effect on your credit score as when you are out actively pursuing credit at your own request. Plus, your score does not experience significant damage if you have the occasional inquiry. Repeated inquiries during a short period of time is what makes your score take a hit.
IF you know your FICO scores, you can walk into a car dealership and tell them that you know your scores and want to know the deal they will offer for that score and ask upon which credit reporting agency they base their rates. Your scores can vary a great deal between agencies, or they can be close. It's crazy!
One of the best things you can remember about your credit rating is that you will get hit hard if the ratio between available credit and amount of credit utilized is high...most people say above 40%. AND, you take yet another hit if you have used over 40% of the available credit on any ONE account. It can drop your score as much as 100 points.
Even if you are armed with your credit score when you walk in the door of the dealership, be prepared that they will eventually run your credit before giving you any final offer. However, any good F&I guy can tell you the FICO requirements for the special offers out there, like 0%. The banks fax them rate and term sheets every day. PLUS, the car dealers made LOTS of money on financing, since lenders discount their rates to them. If they want, they can negotiate on rate.
There are companies out there who specialize in lower grade loans, but I don't know much about the current B and C markets for either consumer loans or mortgages at this point. Things have drastically changed recently and they are constantly changing.
If you don't have great credit right now, you have to be very careful and watch all of the fine print. I have a feeling that there are some wide swings in what different companies will offer at this time, depending on their own financial stability.
Great time to buy a car, horrible time for financing, I would think.
Mortgage pre-approvals can mean a great deal if you've used a reputable source. But, they are only as good as the information you provide to the lender. A mortgage broker knows EXACTLY what requirements (on any given day) a lender has for a particular loan/rate. Your credit to debt ratios, credit score, LTV (loan to value) ratio, etc. But, the problem is that you just don't always know who is reputable and who is not and in this market, the lender can change his terms several times a day.
Car pre-approvals depend, too, on the reliability of the source.
Good luck!!!
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