When is a loan a rip-off?
Excessive interest charges are obvious, but there are other, hidden pitfalls. For instance some dealers will push buyers into longer term loans to make the monthly payment smaller so the car seems more affordable. Do you really want to take 7 years to pay off a car loan? Do you know how much more interest that generates?
What to do before you apply for credit.
One of the most important things to do is check your credit score. Your FICO score is just one number given to you by the three major credit bureaus (Experian, Equifax, and TransUnion). Before a dealer will negotiate with you they want to see what financing option are available for you. Know your score.
What a disclosure tells you.
Federal banking laws govern what must be disclosed to the borrower by the lender. Often these details are glossed over or the deal is pushed through without the buyer taking time to understand what they are signing. But the fine print has been submitted so these dealers are technically compliant. Take the extra time to read the details.
Once you sign, it’s over!
There is NO GRACE PERIOD following your signing of an automobile loan agreement. No three day cancellation period, or any required period in which the borrower may change their mind and cancel the loan.
Do your homework.
The average American consumer will buy and finance a vehicle every 30 months or so. If you live to be 70 years old that means approximately 28 vehicle purchases in your life. If you average a $2,500.00 overpayment per deal that will be $70,000.00 in accumulated financial loses. This figure ($2,500.00) represents the overpayment made by each consumer in price and financing cost on an average car deal in America.

• How do you get bad credit?
Setting aside some mistakes in the information on your credit report, the main reason for bad credit is a history of non-payment.
• What is a credit score?
As stated previously, your credit score is based on an arbitrary and complicated mathematical calculation using a credit industry standard formula.
• What is a bad credit score?
Any Beacon/FICO score of 650 or less. Lately 700 is becoming the minimum.
• What is a good credit score?
Any Beacon score of 700 or more.

• Where and How to buy a car with Bad Credit.

There are usually many choices in most metropolitan areas over 30,000 population.

• Bad credit doesn’t have to mean a “Bad Deal.”
The same principles can be applied in making any judgment of your automobile/vehicle purchase.
• The real purpose for buying with bad credit.
There really are a couple of good reasons to buy a vehicle with bad credit. These do not include reasons of necessity or ego. One is that you can more quickly rebuild bad credit with a series of on-time car payments. Often people with bad credit can be “rehabilitated” in the eyes of lenders if they purchase a vehicle with a co-signer and demonstrate good credit behavior.

www.equifax.com

www.experian.com
Each of these companies are obligated by Federal law to provide you (by request only) with a free copy of your credit report each year. To get these copies you must apply for individual reports from each company each year. Sounds easy and yet each of them will give you some hoops to jump through in order to obtain your credit report from them. Their efforts to make it difficult for you to get your free credit report from them, has given rise to many companies offering to track your credit reports for small monthly fee. To get you to sign up for their services these companies offer you a free credit report from each of the three reporting companies. It seems the Federal government has authorized only one third party company to
obtain all three free reports for you that are are allowed each year and to supply them to you FREE! Below is the Federal Trade Commission website link.
http://www.ftc.gov/bcp/conline/edcams/freereports/

In spite of any difficulties and/or expense involved you must obtain these three credit reports in order to evaluate your own credit. Nearly every dealership (new or used) will want to obtain a credit report
(possibly more than one) in order to determin your credit worthiness, and to be able to better structure your/their loan application(s) to get maximum loan amount and the most months of repayment term. Your
credit report(s) include(s) significant information concerning your credit history, loan repayment statistics (reported by lenders), collections, judgements, legal actions, and of course your credit (Beacon) score. The credit (Beacon) score will be the first thing any that will be looked at by prospective lenders and it is what
you must know and strive to constantly improve. Credit (Beacon) scores are expressed in a number from 400-900 with the higher numbers meaning the better score.

Your credit score will primarily be used (by lenders/dealers) to determine your ability to obtain financing, and the interest rate you may qualify for on a loan. Many items included on your credit report contribute to your overall score. (For more detail see “How to repair my credit score.’) Scores of under 499 are considered “bad risk” with little chance of repayment and consumers with these scores seldom get loans from traditional lenders while always paying the maximum interest allowed by law on any loan they do get. Scores from 750-900 (considered “low risk”) can almost always get maximum term and lowest interest on any traditional vehicle loan. Consumer credit scores of 500-625 are usually classified as “poor risk” with final determination depending on wheather their score has been improving or declining in the past 12 months. Beacon scores of 626-749 are rated as “moderate to good risk,” again with final determination depending on wheather their score has been improving or declining in the past 12 months.
In spite of these basic classifications each loan application is evaluated further by other specific details on your credit report and application. (For more detail see “How to repair my credit score.”)

This would seem like a superfluous or rhetorical question. It is not! Credit as defined by common usage
today means a person’s (or corporation’s) ability to borrow money. Even if you never need credit to purchase anything, your credit will be evaluated today by prosective employers, associations you may want to join, and by various government agencies. All of these evaluations will be made concerning your credit with or without your consent or knowledge.
Only when you apply for a loan can a lender (and/or seller) actually or legally obtain your credit report and only then with your written permission. Remember anytime you sign any form in a retail business that is legally an agent for a lender, you may be giving written permission to obtain your credit report. Read everything you sign carefully! Just for you own information, even a friend lending you money can obtain your credit report if he has your name, social security number and permission (signature).