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Are you ready to take the next step?

Are you ready to take the next step?

Life is a series of milestones, and when it comes to finances, information is your greatest and most valuable asset.

  • Purchasing a Car
  • Buying a Home

Whether it’s your first car or your dream car, buying a vehicle is a big step, and navigating the ins and outs of financing can be tricky. Preparation is key, from determining what vehicle you can afford to checking your credit report and credit scores and planning for how to manage hard inquiries on your credit report from potential lenders. It’s important to understand what role credit plays in the terms of your auto loan.

Q. What does a potential lender look for on your credit report?

Your credit report tells a detailed story about you, your financial accounts and your payment history. Potential lenders and creditors may accept or deny your applications for credit based in part on information in your credit report, as well as their own lending criteria.

  • Payment history: Are you paying your credit accounts as agreed, or do you have missed or late payments? Do you have accounts in collection? While a few missed payments may not result in a denial, they can result in less favorable loan terms.
  • Debt to credit ratio: Using a large percentage of your available credit can be a red flag to potential lenders.
  • Length of credit history: Do you have a long track record of responsible credit use?
  • Types of credit: Lenders generally like to see a good mix of different credit types and that you have previously used multiple sources of credit reliably.
  • New accounts: Have you opened a large number of new credit accounts recently? If so, lenders may question your ability to repay.

Q. How does your credit impact other aspects of vehicle use, like renting a car or finding the right auto insurance policy?

In addition to playing a role in a car purchase, your credit may also figure into things like car rentals and car insurance. Car rental companies may use credit checks as a way of determining the risk associated with renting to you if you are using a debit card instead of a credit card. If the company pulls your credit report, it may impact your credit score. You may want to consider using a credit card instead.

Many U.S. car insurance companies use credit-based insurance scores to help determine risk, or the likelihood of claims, and an inquiry will be generated when an insurance company checks your credit. However, insurance inquiries on your credit report are generally not visible to lenders.

It’s been called one of most stressful things you’ll do in life – and not to mention, one of the largest financial commitments you’ll make. That’s why you shouldn’t enter into it lightly, or without the right information. As you approach this life milestone, arm yourself with the right information, starting with your credit.

Q. What should I do before I begin my home search?

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One important thing you can do as soon as you start thinking about buying a home is checking your credit report. Ideally, this should be done at least six months before you purchase to give yourself time to dispute any information you believe is inaccurate or incomplete, if needed. It’s also important to know how your payment history is being reported by your current creditors.

Look for any information that might be inaccurate or incomplete. Is your personal information, including your address, correct and up to date? Are there any addresses you don’t recognize? Are all of the accounts listed complete and accurate? Do the balances appear accurate? Are there any accounts you don’t recognize?

If you see something that appears inaccurate or incomplete, contact the company. You can also file a dispute with the credit bureau that provided the report. To file a dispute with Equifax, visit our dispute page.

  • Gather any required documents, such as tax returns, pay stubs, and bank statements that you will need to apply for a mortgage.
  • Figure out how much home you can afford. Online mortgage calculators may help. Remember a home’s purchase price is only part of the picture; you may also be responsible for a down payment, closing costs, taxes, insurance and other expenses.

Q. What should I consider when applying for a mortgage online?

Technology has changed the process of obtaining a mortgage, with online mortgages becoming more popular. But because so much personal information is required to get a mortgage, it’s a good idea to keep security in mind.