While any type of credit card can help raise your FICO scores it usually takes approved auto loans to establish car credit

Some of the answers

Even with a traditional or secured credit card you may need some type of terrible credit auto loans to regain your auto credit.

We understand why this is true because since 1992 we’ve been doing bad credit auto sales here at Auto Credit Express. We even built a website so people with bad credit could read about such topics as tote the note loans and certified used cars as well as today’s topic, why, even after establishing credit with a credit card, it is sometimes necessary to finance a car with poor credit car loans.

Bad credit car loans

You may be wondering why you should even apply for a bad credit auto loan. After all, paying cash for a vehicle, while using a regular or secured credit card, can often rebuild credit.

The fact is that this method usually doesn’t help your auto credit, even if it does raise your FICO scores.

This is because any type of credit card is a form of revolving credit. If you don’t pay off the card balance every month, revolving credit allows you to carry over the remaining balance to the next month.

A car loan is different in that it’s a type of installment credit. In this instance, you sign a contract to pay back the loan balance, plus interest, for a fixed payment each month during the loan term.

Another difference is that initial installment loan balances are typically higher than revolving credit limits. They also carry higher monthly payments as a percentage of the credit balance and are much less flexible to changes, which mean buyers have to be more disciplined when paying them back.

Checking your auto credit

In determining your credit scores, FICO looks at both types of credit. Automotive lenders also look at both credit types but pay special attention to how you paid on your installment auto loans. This means that while a good payment history with a credit card will help your credit scores, it doesn’t carry as much weight with car lenders.

For this reason, even applicants with decent credit scores are sometimes turned down for an auto loan if they’ve never had one or if it turns out that a previous car loan had a poor payment history.

In either case, applicants might have to first prove themselves by establishing their car credit with a lender willing to take a greater risk. In most cases, this means signing up for a poor credit car loan.

But if you have been turned down for a traditional auto loan, where do you find a dealer that can get you approved?

How we can help

Websites like Auto Credit Express specialize in assisting people with bad auto credit find a dealer for their best chance at getting approved for a bad credit car loan.

This means that if you really want your car credit back on track, you can begin now by filling out our online auto loans application.

How to prevent fraud while financing with poor credit car loans

It can happen

Consumers with bad credit and approved auto loans often don’t realize they can become the victims of identity theft.

We can understand this because since 1992 we’ve been doing bad credit auto sales here at Auto Credit Express. Our web site was even created so that people with bad credit could study such topics as the terrible credit auto loans process and cosigner issues as well as today’s topic, avoiding identity theft.

Credit repair and identity theft

One of the quickest ways to halt the climb to better credit is having your identity stolen. And even though this is less likely to occur to people with poor credit, it’s still possible. That is, someone could be making your credit profile look worse even while you’re trying to improve it, as this article from TransUnion points out:

Tips to Identify Fraud

Your credit report, your financial statements and even your mail are key places to look for signs of fraud and identity theft. With a watchful eye and staying in tune with your credit activity, you can identify fraud.

The signs may vary, but these signs are common signals that can help identify fraud activity:

•    There are accounts, payment histories, Social Security Numbers, addresses, employers or inquiries on your credit reports that you don’t recognize.
•    One of your creditors informs you that they have received an application for credit with your name and Social Security Number.
•    Incoming calls or letters state that you have been approved or denied by a creditor to which you never applied.
•    You receive credit card, utility or telephone statements in your name and address for which you never applied.
•    You no longer receive your credit card statements, or you notice that not all of your mail is delivered to you.
•    Your credit card statement includes purchases that you don’t recognize.
•    A collection agency tells you they are collecting for a defaulted account established with your identity, but you never opened the account.
•    If you suspect that identity thieves may have targeted your child, TransUnion can help.

As we see it

Even while you’re working on repairing your credit and making timely payments on a bad credit auto loan, you should be aware of the signs of identity theft.

At Auto Credit Express we specialize in assisting people with bad auto credit find a dealer for their best chance at getting approved auto loans.

So if you really want to get your car credit back on track, you can begin now by filling out our online auto loans application.

Consumers with poor credit should not confuse rent to own horrible credit auto loans with typical new car leasing programs

Repairing your credit

Applicants with bad credit often don’t understand why a rent to own program can’t help their credit situation while a problem credit auto loan can.

We understand their confusion because we’ve been involved in bad credit car sales since 1992 here at Auto Credit Express. We even created a website so individuals with poor credit can review topics like repossession and credit scores as well as today’s topic, understanding the difference between bad credit car loans and rent to own cars.

New car leasing

With traditional new car leasing programs, the payments are generally lower than retail financing because you only pay for the portion of the car that you use. For example, in a 2 year lease you pay for 24 months of interest plus the vehicle’s depreciation during that time.

Because most new car leases don’t require a down payment, people who lease are usually “upside down” (the vehicle is worth less than the lease buyout) during the entire lease term. Because of this, lenders consider leasing to be a higher risk than retail financing so they usually offer this option to their most qualified applicants – those customers with very good to excellent credit.

Rent to own

Programs involving rent to own cars are very similar to buy here pay here bad credit car finance programs. That is, they are loans taken out at a rent to own car lot that require a down payment and a fixed number of payments with payments (with a small buy-out at the end of the contract) that are typically due every week. Like a buy here pay here program, these payments are usually made in person at the lot where you rented the car.

If you fall behind or encounter other issues, you’ll deal with the rental company regarding any arrangements. A failure to follow the terms of the rental contract will result in the rental company repossessing the car.

And like tote the note dealers, the rental company has the option of whether or not to report your payments to the credit bureaus. Most, unfortunately, do not. Typically, vehicles available for rent are older used cars because most of these rental companies are not franchised new car dealers.

Pros and cons

Pros: Most rental vehicles are in the moderate to lower-price range and some people actually prefer to make payments on a weekly basis. The rental payments are made face to face so you and your agent know each other. Finally, many rental companies won’t run a credit check before renting you a car.

Cons: Rent to own car companies typically won’t report loans or payments to the credit bureaus. Secondly, because these rental vehicles are usually older, many are not that reliable. In addition, for many people, it’s usually not convenient to visit the rental agency every week to make a payment. Lastly, rental terms typically range from 12 to 24 months, limiting the vehicle selection to lower-priced, older cars.

The Bottom Line

Car buyers with poor credit shouldn’t confuse the term “rent to own” or dealers offering used car leasing with traditional new car leasing programs.

If you’re interested in cheap transportation without a credit check, then the rent to own cars dealer wins. But even with a credit score below a 640 FICO or a credit rejection for a traditional auto loan, you should only consider a rent to own or buy here pay here dealer after you’ve checked out the option we offer.

At Auto Credit Express we specialize in assisting people with bad car credit find a dealer for their best chance at getting approved for a problem credit auto loan.

So if you really want to get your auto credit back on track, you can begin now by filling out our online car loans bad credit application.

Credit challenged consumers can actually get a free credit score before they apply for poor credit car loans

The best things in life

Some applicants with bad credit might finish the above sentence with the words “are free” but this usually isn’t the case if they’re financing a vehicle with terrible credit auto loans.

We know this because at Auto Credit Express we’ve been involved with bad credit auto sales for 20 years.  We even developed a web site so applicants can look up topics including qualifying for approved auto loans and preventing repossession as well as today’s topic, how to get your free credit score.

Credit Karma

As far as free things are concerned, air, water and one credit report from each of the major bureaus fall into that category. But practically everything else, including your FICO scores, requires that you cough up a few bucks.

In the case of credit scores, that usually means signing up for one of the services, or a combination of services, offered by one of the three credit bureaus at a cost of $15 per month or more.

That is, until San Francisco-based CreditKarma.com came onto the scene. Here is how the company explained it in one of their initial press releases:

Credit Karma, a resource that helps empower consumers to actively manage their financial health, today (12/12/08) announced an agreement with TrueCredit.com, a leading provider of credit reports and consumer credit education, that will enable consumers to obtain their TransUnion credit scores at no cost. Both companies believe that it is more important than ever to provide consumers with the tools and information to better understand how lenders are evaluating them.

“Credit scores are being scrutinized more than ever before, so it is critical for consumers to know what their score is and how it’s likely to be viewed by a lender,” said Lucy Duni, vice president of Consumer Education at TrueCredit.com by TransUnion. “Since your credit score is derived from the data in your credit report, reviewing your report on a regular basis is also essential to gaining a truly holistic view of your overall finances.”

“We are proud to partner with TrueCredit.com to provide consumers with the chance to access their score for free,” said Kenneth Lin, founder and CEO of Credit Karma. “Credit scores are a window into one’s financial health, and Credit Karma remains committed to giving consumers free access to that score as well as educating them about the tools they can use to understand it.”

To obtain your free TransUnion score from Credit Karma, visit their web site at: http://www.creditkarma.com/.

One small catch

Although your free credit score comes from TransUnion, you need to remember that your credit score can vary from bureau to bureau, so the scores from both Equifax and Experian could be different from the one you receive through Credit Karma.

One other item you should be aware of is that in order to receive your score from Credit Karma you have to endure marketing offers from various companies based on your credit score in order to view the results.

As we see it

Even taking this into consideration, however, one free credit score is better than none at all and it does give you a real idea of where you stand with lenders. What that means is that, from our perspective, maybe at least some of the best things in life are free.

Another free service you should know about can be found at Auto Credit Express, where we specialize in assisting people with bad auto credit find a dealer for their best chance at getting approved auto loans.

So if you really want to get your car credit back on track, you can begin now by filling out our online auto loans credit application.

There is a way you can boost your credit repair efforts even further during horrible credit auto loans

The start

If you have bad credit, in most cases the best way to establish car credit is a problem credit auto loan. But there are steps you can often take to further raise your FICO scores.

We know because we are involved in bad credit car sales and have been since 1992 here at Auto Credit Express. We also designed a website so that applicants with poor credit can understand such topics as authorized users and bankruptcy, as well as today’s topic, additional credit repair during no credit auto loans.

Credit repair

Even if you’re financing a bad credit car, if you haven’t already done so, now is the time to make sure the information in your credit reports is accurate.

To help you do this, we’ve created a new web site at FutureCreditScore.com and partnered with a Michigan-based company, United Credit Education Services, to offer our applicants an additional credit repair opportunity.

United Credit Education Services

United Credit Education Services (UCES), which is affiliated with a federal credit union, is also a financial services company that deals with credit education and restoration. Top-rated by the Better Business Bureau, UCES can help will guide you through the process of disputing inaccurate, erroneous and obsolete information in your credit files.

If you decide this is the way to go, you’ll find yourself using a web-based application and working with a team of experienced professionals that can offer you the chance to raise your FICO scores both quickly and legally.

This means that if a low credit score has prevented you from getting approved for an auto loan or if you’re unhappy with either the interest rate or terms of your current loan you can, with the help of the professionals at UCES, take the necessary steps to repair your credit and improve your credit scores at all three credit bureaus.

For more information on the steps you can take to correct information contained in your credit reports as well as improve your credit scores, go to www.futurecreditscore.com.

As we see it

Here at Auto Credit Express we’ve helped thousands of people with bad car credit find a dealer that for their best chance at getting approved for a bad credit car.

So if you’re serious about getting your auto credit back on track, you can begin now by filling out our online car loans bad credit application.

How to improve your chances of getting approved auto loans

Credit reports

Loan decisions are based on credit scores but it also helps to see your credit reports before applying for poor credit car loans.

We understand this situation because we’ve been connected with bad credit auto sales since 1992 at Auto Credit Express. Our website also helps applicants understand topics such as the terrible credit auto loans process and bankruptcy as well as today’s topics, knowing your credit scores as well as making sure your credit reports are accurate.

Credit score commercials

If you watch television, you’ve probably seen commercials offering people a free credit score. But do you really need this kind of service and is it really free?

The fact is, these companies are advertising so that you’ll visit their web sites and sign up for additional paid services. But there is one site where you can view and print your credit reports from each of the three credit bureaus without spending a dime.

Making credit reports and scores available

The Fair Credit Reporting Act, passed by Congress in 1970, enables consumers to have access to the information in their credit files. In 2003, another law (the Fair and Accurate Credit Transactions Act or FACTA) changed the original act and requires each credit bureau to furnish consumers, on request, with one credit report per year at no charge, as well as access to their FICO scores for a reasonable fee (not free but at least available).

This can be done in one of three ways: You can write to each bureau, you can call their toll-free numbers, or you can go to this website: www.annualcreditreport.com.

If you choose the web site route, you’ll need to furnish information that establishes your identity. Once validated, you can view and download your report immediately.

Those additional services

And what about those extra services you see in the ads?

A number of companies including freescore360.com will, for a fee, furnish you with a credit report and a credit score from each credit bureau. Credit monitoring services are also available for an additional fee that can help you guard against such things as identity theft.

Once you know

If your credit scores fall below a 640 FICO we want you to know that at Auto Credit Express we assist people with bad car credit in locating a dealer for their best chance at getting approved auto loans.

So if you really want to get your auto credit back on track, you can begin now by filling out our online auto loans application.

Once you have established your auto credit with a bad credit car loan you might want to consider this option

We know credit

If you’ve been financing a vehicle for a while using terrible credit auto loans you might be able to switch to something with a lower monthly payment.

We’ve sometimes seen this happen as we’ve been doing bad credit auto sales for twenty years next month here at Auto Credit Express. We even built a web site for applicants that explain such issues as credit scores and bankruptcy as well as today’s topic, bad credit auto loan refinancing.

Refinancing

Refinancing poor credit car loans can mean a number of things: cutting the interest rate, lowering interest expenses or even reducing the monthly payment. It can sometimes even do this as you to continue to establish your car credit.

Typically, you might qualify for a lower interest rate if you’ve made timely payments on your first bad credit car loan for 18 to 24 months, depending upon your original credit situation. A lower interest rate also reduces your interest expense.

A lower monthly payment can also be arranged by extending the loan term. If you currently have 36 to 48 months left on your payment schedule, a refinance can add an additional 12 months or more to the loan. Although this extends the payoff date (and a possible increase in interest expenses), a lower payment means more money in your budget for utility bills and other essentials. It also reduces the chances of late or even missed payments.

Credit score impact

Refinancing a bad credit auto loan can also improve your credit scores. Think about it: If a high payment in the past caused any problems, you can now boost your FICO scores. Since these lenders report to the credit bureaus and because they’re now lower, your now timely payments will help boost your scores.

The Bottom Line

If your current car payment is too high, one option you may have to lower your monthly payment (and possibly even your interest rate at the same time) is refinancing poor credit car loans.

And speaking of loans, if you haven’t yet applied for one, you should know that Auto Credit Express has helped thousands of people with bad car credit find a dealer that will give them their best chance at getting approved auto loans.

So if you’re serious about getting your auto credit back on track, you can begin now by filling out our online auto loans application.

Understanding the difference between a new car dealer that offers poor credit car loans and a buy here pay here dealer

Credit repair

Applicants with bad credit often think there are no differences between a tote the note dealer and a new car dealer that offers terrible credit auto loans.

We should know since we’ve been involved with bad credit auto sales 1992 here at Auto Credit Express. We even designed a web site so that applicants with poor credit can learn about issues such as FICO scores and approved auto loans as well as today’s topic, the difference between buy and pay here dealers and new car dealers that offer bad credit auto loans.

Tote the note dealers

When you visit a buy here pay here dealer, you arrange a car loan and make payments right at the dealership. You do this because your credit is approved by the dealer instead of a third party, such as a bank or credit union.

Although some dealerships that offer in-house financing will accept weekly or bi-weekly payments either by phone or online, most require that you physically bring your payments in to their location.

How dealers differ

In some ways, there isn’t much difference between tote the note and traditional car dealers. In fact, a growing number of franchised new car dealers have begun to offer services normally associated with car dealerships that offer in-house financing. You might not see “Buy Here Pay Here” printed on their billboards, but phrases such as “We Finance” may tell you that they offer this option.

The biggest difference between them is in the shopping experience. At a traditional new car dealership, the discussion about financing occurs once you’ve picked out your vehicle. At that time, the finance manager will help you explore your payment options.

At buy and pay here dealerships, the process is usually reversed. First, you’ll talk about your credit situation. Once the salesperson understands it, you’ll then be shown the cars that fit your credit profile.

Highs and lows of buy here pay here dealers

Pros

1. Available cars and available credit

The most important benefit of in-house financing dealerships is that they give most bad credit buyers the opportunity to get transportation. In some cases, these dealerships aren’t just an option — they may be the only choice if your credit is really bad.

2. Trade-in flexibility

Buy and pay here dealers are usually more flexible when it comes to accepting trade-ins on older cars. That’s because these dealers have traditionally gotten long-term use out of cars that a typical new car dealer will not accept. Since they’re more likely to find a buyer for an older vehicle they’re more likely to consider one as part of a down payment.

Cons

1. Very little chance of establishing your car credit or improving your FICO scores.

One of the best ways to rebuild car credit is to make timely payments on a car loan. But at buy here pay here car dealerships, even if you make all your payments on time this probably won’t happen since most don’t report loans or payments to the credit bureaus. Since a higher percentage of these loans end in repossession, this forces many buyers to continue the cycle of older cars and high interest rates.

Try us

With a credit score below a 640 FICO or trouble getting a traditional auto loan, you should still only consider a buy here pay here dealer after you’ve explored another option.

At Auto Credit Express we help people with bad car credit find a dealer for their best chance at approved auto loans.

So if you’re serious about getting your auto credit back on track, you can begin now by filling out our online auto loans application.