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Credit Preparation

Credit Preparation
The preparation for buying a vehicle should start long before the purchase itself. Most people nowadays aren't able to save up and pay cash for an automobile, so financing is the primary way to fund a vehicle purchase.

In order to qualify for the most competitive and lower annual percentage rates (APR) one must be low risk. Individual credit risk is typically determined by FICO score in today's market, as calculated and provided by one of the three primary credit bureaus: Equifax, Transunion and Experian. FICO stands for the Fair Isaac Corporation who originally created the formula used for credit risk calculation and ranges from 350 – 850. The break down of what is evaluated and the percentage of consideration during calculation is provided in the graphic. The two most important aspects of any credit profile are the repayment history and credit utilization rate, or how much of available credit an individual uses on a regular basis.

Most people don't realize that you must borrow and promptly repay substantial amounts of money, on more than one occasion, from multiple lenders in order to improve their credit profile. One place to start the process of credit education or improvement is to visit one or more, of many websites that offer a great deal of information free. One of which is http://www.life123.com/career-money/credit-debt/credit-management/index.shtml

Knowing where your credit score currently stands is critical to being a more informed consumer and getting the most for every dollar spent. Other websites such as www.creditkarma.com offer not only a credit report, but also an actual credit score for free. By simply creating a user account and verifying information you can be on your way to improving your credit. Stay tuned for future articles informing you on everything related to vehicle purchases and thanks for reading.

~Matthew Elgersma

Integrity Auto LC
575-524-6959
901 South Valley Drive
Las Cruces, NM 88005

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