There are three national credit bureaus that collect information about you, and they obtain credit data independently. So while you might assume that your three credit reports and credit scores look exactly alike, they can actually differ significantly.
Credit scores are important indicators of your financial health. Lenders use credit scores as major tools to determine:
- Whether or not you are a good candidate for a loan.
- What type of interest rate you will pay.
While a credit score is a key determinant of your creditworthiness, lenders also examine the information on your credit report and your loan application. Regularly checking your credit report enables you to:
- Be informed of the most up-to-date information in your credit history.
- Correct any inaccuracies, thus ensuring that your credit data is a true depiction of your credit record and increasing your chances of receiving credit under the best possible terms.
The date that you opened your oldest account is too recent.
Your oldest account is still too recent. A credit file containing older accounts will have a positive impact on your credit score because it demonstrates that you are experienced managing credit.
What You Can Do
Don’t open more accounts than you actually need. Research shows that new accounts indicate greater risk. Your score will benefit as your accounts get older. Continue reading Negative Score Factors
Bad credit doesn’t necessarily mean that an auto loan is out of reach. Though lenders prefer borrowers with a credit score of 760 or higher, you may still be able to purchase a car with an imperfect credit history. Higher interest rates will probably accompany your loan, but shopping around and comparing offers can help you to find a fair price.
Poor credit may cause higher interest rates, but there are plenty of ways to save money on your car loan. For starters, try choosing a shorter term loan. A 3-year loan will likely carry a lower interest rate than a 5-year loan. Your monthly premiums will be higher on the 3-year plan, but you’ll pay off the loan faster and pay less overall in the end. Also, consider buying a new car rather than one that is used — a loan for the latter is usually more expensive.