Your credit report does not contain accident information. It contains information on how you pay your credit cards, auto and mortgage loans; public record information including civil suits, judgments, bankruptcies, and tax liens; and collection accounts.  There are two companies that compile insurance claims information – Insurance Service Office (ISO) and LexisNexis.  Most insurance companies report their auto claims information to both companies, but LexisNexis is more widely used.

Even though the accident is not on your credit report, your credit can be impacted by the accident depending upon the circumstances. You could be sued by the court to pay damages, the insurance company may not cover all the costs of the accident and you can’t pay the difference.  Any of these can have a major impact on your credit. read more »

Equifax, one of the three national consumer credit reporting agencies, conducts a monthly study on consumer credit trends.  The latest was conducted in April 2011 and released in June 2011.  According to Equifax, credit is becoming more stable and growing; write-offs have peaked; and more new accounts are being opened.  This is great news.

New credit has increased nearly 15% from April 2010 which represented $209 billion compared to $240 billion in April 2011. This is below the levels of over $400 billion in 2006 and 2007.  Lending has increased from a year ago in auto, bank, student loans and home equity revolving loans.  Delinquencies have peaked in most areas except home loans and student loans.  There are fewer delinquencies from loans issued since 2008 because of the tighter credit policies of financial institutions. More loans are being offered to consumers with scores below 600, which are classified as subprime. read more »

A study on student attitudes toward acquiring debt and self-esteem was conducted by a team of three sociology researchers from Ohio State University.  They studied attitudes toward acquiring debt while attending universities around the United States.  The research was conducted on 3,079 young adults aged 18 to 34 who were interviewed, in-person, every two years from 1986 through 2004.

The results were that the students were empowered by student loan and credit card debt.  The more they owed, the more they felt control over their lives and had greater self-esteem.  Credit cards allowed them to buy non-essentials immediately without having to wait until they saved the money. The older respondents did have a positive view of debt but as time went on, student loan debt had an impact on self-esteem. read more »

On July 6^th 2011 the Federal Reserve Board and the Federal Trade Commission issued final rules regarding the credit score disclosure regulations within Dodd-Frank.  These new rules serve to finalize the requirements of the Fair Access to Credit Scores Act of 2010 championed by Senator Mark Udall (D-CO), which will be part of the July 21, 2011 effective date of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Consumers will now enjoy unprecedented free access to their actual credit scores in most cases as defined below.

Credit score disclosure is required by lenders under these conditions; read more »

In May 2011 Experian, one of the three major credit reporting agencies, released the results of their quarterly analysis of the automotive credit industry for Q1 2011.  It actually appears it’s a little easier to get a loan in 2011 than in 2010. It indicated an increase in new car loans in the last year to those with less than perfect credit and credit scores. The credit score used in the analysis was Experian’s proprietary credit score which has similar score ranges as FICO.  Experian’s credit score ranges are 330 to 830 and FICO’s range is 300 to 850. read more »

Your credit score has a major impact on the interest rate you pay for your car loan. MAJOR!  There are many online tools that give your rates based upon your credit score, but before you even begin to shop let’s dig into just how important that three digit number is to your ability to get an auto loan.

The credit score predicts credit risk and for most scoring systems a high score indicates lower risk.  As such, the interest rate will be lower.  On the other hand, a low score indicates higher risk and you would pay higher interest rates, or be denied straight out.  Those with lower scores will have to pay more to get financing. read more »

If you are evaluating whether to lease or buy a car, you need to be aware of all the costs.  And, what are the pros and cons of leasing versus buying?

Leasing advertisements focus on the monthly payments which are usually much lower than that of car loans. The lease terms are shorter and often require a large down payment. There are usually additional fees and penalties related to the lease such as penalties for exceeding mileage. At the end of the lease, you don’t own the car or have any car payments..unless you’ve exceeded the mileage allotment. read more »

When you shop for a car it takes time, whether you shop online or visit dealerships.  In the end you’ll likely still go to several dealerships, test drive several cars, make your final selection and then negotiate the price.  The question is…are you as diligent when you shop for financing for that new or used car?

Your credit has an impact on the interest rates you will pay as well as down payment requirements.  The preference should be to pay in cash, but most of us aren’t wealthy, so we need to find the best deal on a loan. read more »

There are many types of credit scores.  Most people are familiar with FICO’s credit score, mainly used for mortgages and refinancing home loans or home equity lines of credit.   However, there are many other types.  For example, there are alternative credit scores for auto loans, insurance and even to determine employment status.  All the scores are based on your credit report information, but are just calculated in different ways.

The auto score is a very popular alternative to the standard credit score and it is important consumers understand who can look at it.

The auto lending industry uses a specialized auto score, usually from FICO.  It’s called the Auto Industry Option Score.  Approximately 90% of auto loans use this auto score instead of the more familiar credit score.  The auto score judges your credit risk more heavily weighted to your prior auto loan or lease payment history.

Who can look at your auto score:  auto lenders, auto dealers and you.  Your permission is required, in the form of a signed credit application, for an auto dealer or lender to view your auto score.

You can view your auto score by becoming a member of SmartCredit.com Whenever you update your credit report, all your credit scores are updated as well, including your auto score.

Be sure you understand there is a difference between your credit score and your auto score.  Confusion often is to the advantage of the auto dealer.

Click here for more information on this Auto Scores >>

What can you do?

Be proactive by using SmartCredit.com and ensure all your scores are the best they can be.  Smart Credit’s patent-pending Action buttons communicate directly with your creditors for anything you need, including improving your auto and credit scores.

Its simple.  Just use Smart Credit’s innovative credit report and click on action buttons to talk directly with your creditors to get better interest rates or ask your creditor anything.  No need for phone calls, writing letters or looking up account numbers.  You can fix credit report errors, get goodwill corrections, recover from identity theft, replace a lost or stolen credit card or settle a debt all directly with their creditors.  It’s fast and effective!

Always Active Complete Protection gives Smart Credit members the most complete credit monitoring and identity protection available.  Having only one or the other is not enough.  It also includes our Mobile Rapid Response action button in alerts for the fastest way to stop identity theft.

David B. Coulter – Founder and C.E.O. of SmartCredit.com

When buying a car most people don’t know their credit score is not used to determine their car loan.  Instead, a different score is used.  It’s something called an Auto Industry Option Score (‘Auto Score’).  This auto score is usually calculated by FICO exclusively for use by auto lenders to determine your loan qualification, down payment and interest rate.

Almost 90% of auto lenders base their lending decision on your auto score. It is calculated primarily on your previous auto loan history and not your overall credit as would normally be the case for a mortgage or credit card.  You would be surprised how many people can get a car loan and not a credit card.

Many lenders are willing to give out auto loans to those with less desirable credit scores. This is because studies have shown people with poor credit histories will generally keep their auto loan payments in pretty good shape all the while letting their other credit go unattended in one way or another.  This is another reason why they need an auto score to better guide their lending decision.

Because lenders are more likely to use your auto score, instead of your credit score, getting an auto loan can be a great way to build or restore your credit. Make those payments on time and begin to build up a positive credit history.

Know your auto score.  SmartCredit.com includes our auto score at no additional charge.  It is heavily weighted on the following credit report factors, which FICO also uses in their auto score:

- An auto loan or lease sent to collections

- Any late payments on an auto loan or lease

- An auto loan or lease settled for less than owed

- A repossession by the lender

- Previous two year overall credit

Smart Credit’s auto score range is between 350 and 850:

How to best prepare for an auto loan application?

Make sure your credit report is the best it should be before you apply for an auto loan.  Use Smart Credit to fix errors, get good will corrections and settle out debts.  It’s fast and easy with our action buttons.

Being proactive with your credit will not only improve your credit score, but will have a positive impact on your auto score as well.  Especially, if you take these actions on your current or past auto loans.

David B. Coulter – founder and C.E.O. of Smart Credit