These Two Moves Can Save You Thousands When You Buy a Car

Interest rates are still at some of the lowest they’ve ever been — making it super tempting to finally get a new ride. Plus, all these crazy car deals are being advertised… how could you not take advantage?

Whether you’re eyeing a shiny new vehicle or a pre-loved one, there are a few things you need to get in order before you sign on the dotted line: your credit score and your car insurance. If either of them aren’t taken care of properly, you could end up paying an extra $7,600 — or more.

If you can afford the car, why does your credit score matter?

Financing a new or used car isn’t any different from getting a mortgage or taking out a personal loan — at least not when it comes to the interest rate.

People with better credit scores get better interest rates, period. WalletHub found that someone with fair credit will likely spend five times more than someone with excellent credit on the same three-year, $20,000 car loan. That’s an average of $5,997— a quarter of the car itself!

Even if you can afford the car, don’t make the mistake of paying 25% more just because your credit score is meh. That number is something you can fix, and you can start by checking it on a free website called Credit Sesame. 

Within two minutes, you’ll get access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. You’ll even be able to spot any errors holding you back (one in five reports have one).

It’s free and only takes about 90 seconds to sign up. Use it to start fixing your credit, and you could save almost $6,000 on your car loan.

A required bill for your new car doesn’t have to be an expensive one.

The other way you could be wasting serious cash is through your car insurance. It’s easy to just keep your old insurance company when you drive your new car off the lot — but it could mean hundreds of dollars down the drain each year.

When you’re ready to buy your new car, check a website like Insure.com to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

People have saved an average of $540 a year — that’s an extra $1,620 while you pay off your three-year car loan. All it takes is a few minus to look at your options.

So before you decide to buy a car, make sure you have your credit score in check and your car insurance options lined up. If not, you could be making a very pricey mistake.

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Source: thepennyhoarder.com

13 Credit Cards Offering Free Fico Scores

It’s easy to get your credit report for free; in fact, you can get all three copies from each major credit bureau for no charge every 12 months. Unfortunately, while your credit history contains all the financial information contributing to your credit score, it doesn’t include the credit score itself.

Discover free credit ccore

Several websites, like Credit Karma and Credit Sesame, offer free credit scores, but they use their own calculation rather than the FICO score. And since the FICO score is the one used by most lenders in the country, it’s the one you’ll want to pay close attention to.

VantageScore 3.0, while less popular, is also a good option because it’s actually calculated by the credit bureaus, and its usage among financial institutions is increasing.

But unless you’re willing to pay for your FICO score or VantageScore, it’s difficult to get an accurate view of your credit score.

How to Get Free FICO Scores

Luckily, more and more credit card issuers are giving their customers free access to their personal FICO scores, and often even include credit monitoring service. Browse the list to see if any of your current credit cards provide this complimentary service.

If your credit card isn’t on the list but you’ve been considering getting a new credit card for other reasons, you can use these as a starting point to select the right one for you. Just remember that you never need to carry a balance on your credit card to take advantage of a free FICO score offer.

Which Credit Cards Offer Free FICO Scores?

Here is a comprehensive list of credit cards that offer a free FICO score. You’ll find out what type of card you need, or whether general bank membership is enough to qualify.

Credit Card Who Can Access
American Express
Offers FICO score to cardholders. Compares your current score to your previous month’s score, and shows what category you’re in.
Cardholders
Bank of America
Gives cardholders their TransUnion scores from FICO. It shows you the trend of your recent FICO scores and how you compare to others nationally. You can see what is influencing your score, and also get notifications when your updated score is available.
Cardholders
Barclaycard US
Also uses your TransUnion FICO score. You’ll receive an email alert whenever your score changes, plus information on why it has changed.
Cardholders
Chase
Provides FICO 8 scores using your Experian credit report. In addition to your score, you’ll get an analysis on why your FICO score is at that number, plus information on how you can improve your score.
Slate Cardholders
Citi
Get your FICO score using information from your Equifax credit report. Provides a helpful chart with your score that shows how lenders interpret different score ranges.
Certain Account Holders
Commerce Bank
Your FICO credit score is included on every monthly statement, along with why you scored that way and tips on improving your score. Also shows you how your score could potentially affect rates and terms.
Cardholders
Discover
Comes from your TransUnion credit report. You’ll receive your free FICO score on your monthly statement and can also access it online. There you’ll also see the two largest factors affecting your credit.
Anyone
First Bankcard
You’ll get monthly access to your FICO 8 Bankcard Score, which is what banks use to analyze their customers. You can access your credit information online, where you’ll also see the major contributing factors to your FICO score.
Cardholders
Walmart Credit Card
In addition to your monthly FICO score, you’ll also see the top two reasons impacting your number. Free service for those enrolled in online statements.
Cardholders Enrolled in E-Statements
Wells Fargo
Currently offered to credit cardholders, and will soon include anyone with any line of credit with Wells Fargo, including a mortgage, car loan, student loan, or personal loan. Your free FICO score is offered through the bank’s app on your smartphone or tablet.
Anyone with a Consumer Credit Account

Credit Cards Offering Other Free Credit Scores

The credit cards listed below don’t offer FICO scores, but they do offer other reputable credit scores from some of the credit bureaus.

Credit Card Who Can Access
Capital One (VantageScore 3.0)
Capital One’s free credit monitoring tool is called CreditWise. Anyone can create an account to logon and access their credit score, either online or through the smartphone app.
Anyone
US Bank (Experian)
Cardholders get automatic access when they log into their accounts online.
Cardholders
USAA Bank (VantageScore 3.0)
Both bank members and credit cardholders receive daily credit monitoring from Experian. You can see your current credit score as well as past scores, and you’ll get regular alerts on any changes.
Members

Why is it important to check your FICO score?

Keeping track of your FICO score is an important part of maintaining your finances. It doesn’t matter if you’re actively working to repair your credit or are preparing for a major purchasing involving a loan. Whether you know you have good credit or aren’t entirely sure, the point is — you need to know.

Compare it to getting a dental checkup and cleaning every few months. You might not have any cavities, but you still go to prevent getting any in the future. Checking your FICO score works the same way.

If you find out your number is low, you can get the help you need to fix it. If your FICO score is on par, you know it’s a good time to get the best rates on a new loan, or refinance any current loans to a lower interest rate.

Why do your credit scores differ?

Even if you use the same scoring company, like FICO or VantageScore, you may receive a few different credit scores. It may seem strange that these numbers should differ, but in reality, it’s not uncommon at all.

That’s because you receive a separate credit score for each of the three credit bureaus: Equifax, Experian, and TransUnion.

Each credit bureau may collect slightly different financial data that contributes to your FICO score. In some cases, your creditors may only report information to only one or two of the credit bureaus.

It may seem complicated, but lenders view all three credit scores to get a more holistic look at your credit history. Typically they use your middle score to determine your loan terms.

If you’re applying for a loan with a spouse or someone else, the lender usually uses the lower of the middle credit scores. So if your middle score is a 680 but your spouse’s is just a 625, the lender will go with the 625 for your loan application.

How can you improve your FICO score?

The good news is, once you’ve accessed your FICO score, you’ve already taken the first and most important step in fixing your credit.

Knowledge is power and it can be especially helpful if you have access to information on why your credit score is where it is. Even if you don’t, it’s easy to look at your free credit report and see what negative items jump out.

Anything like late payments or delinquencies will quickly lower your FICO score. It’s best to get those accounts into good standing and continue to make payments on time.

Lower Your Credit Utilization

Lowering the amount of debt you owe is also a straightforward way to improve your credit score. It may not be easy to make those extra payments on your credit card each month, but lowering your credit utilization can have quick results if you’re trying to increase your credit score fast.

Remove Negative Items

You can also explore your options in getting derogatory items removed from your credit history.

It’s is possible to do on your own, but it’s also helpful to enlist a professional credit repair company, especially if you have several negative items. Reputable companies understand your rights when it comes to dealing with creditors and collection agencies.

While handling credit negotiations can potentially take a lot of time over the course of several months, a credit repair firm takes that burden off your shoulders.

Plus, you don’t have to deal with the emotional issues that come with trying to negotiate credit repair. Instead, you have a professional counselor who is highly trained to work on your behalf.

For a full list of great companies to work with, check out our list of reviews here.

Monitor Your Credit

Regularly checking your credit score is great for your financial health. And if you can take advantage of a free monitoring service through your credit card or bank, then you’re already one step ahead of most people.

Jump on the opportunity to keep a routine eye on your credit score. Not only does it help keep you up to date on important financial information, seeing that number on a regular basis can be a strong motivation to keep your spending and payments on the straight and narrow.

6 Damaging Side Effects of Having a Bad Credit Score

Side effects of a bad credit score

As you make another large purchase against your credit card, inching closer towards maxing out, you might not realize the negative ramifications this activity will have on your credit score. The same goes for making the odd late payment on your hydro bill or car loan payment. Mounting debt that is not paid off in time or in full can have a major impact on your credit score.

A bad credit score can have more negative consequences than you may think

So what’s the big deal about having a low credit score? These days many institutions – from loan officers, to businesses, to insurance companies – look to your credit history before making a move. You could find your low credit score putting you in a position where you can’t get approved for a loan, get a job, or even find a place to live. Here are 6 damaging side effects of having bad credit.

1. Your Loan Applications Might Not Be Approved

Lenders and creditors see borrowers with poor credit as high risk, which means they’ll be less inclined to lend you the money you need. Whether you’re looking for a mortgage to buy a home, or a loan to finance a new car, you might find your loan applications being denied.

2. You’ll Be Subject to High Interest Rates

If you do get approved for a loan, you’ll most likely end up being stuck with a really high interest rate. Since lenders see people with a poor credit score as risky business, they’ll make you pay for it by attaching your loan with a sky-high interest rate. The higher your interest rate on your loan, the more you’ll be paying towards interest rather than the principle over the long run of your loan period.

3. You’ll Be Subject to Higher Insurance Premiums

Even insurance companies check background credit scores. Their claim is that poorer credit scores are associated with an increased number of claims filed. This theory prompts insurance providers to check a person’s credit background. If they find that you’ve got a credit score that’s less-than-par, you’ll most likely be charged a higher premium, no matter how many claims you’ve actually filed.

Do you know the ramifications of having a bad credit report?

Fixing a bad credit score

4. You Might Have a Tougher Time Landing a Job

Many jobs – especially ones in upper management or in the financial industry – have specific criteria that potential employees need to meet, including having a strong credit score. You might find it a lot more challenging to land the job you want because of your bad credit history, particularly if you’ve got exorbitant debts amounts outstanding, or even a history of bankruptcy.

5. Starting Your Own Business Might Be a Challenge

Not only will finding a job be more difficult with a low credit score, but even starting your own business might be a challenge. Many new businesses need the assistance of a bank loan to get started. With a low credit score, banks will be less likely to approve your loan application, even if your business idea is a great one.

6. You’ll Have a Harder Time Getting Approved for an Apartment

Even landlords check the credit history of potential tenants. If you’ve got bad credit, the landlord might be less inclined to approve a lease, and will sign it over to a tenant with good credit instead. Landlords, much like insurance companies and banks, make the assumption that those with poorer credit are more likely to be delinquent on monthly payments, which puts them at a greater financial risk.

The consequences of having poor credit may be a lot more extensive than you may have thought. Your best bet is to do everything you can to get your credit back into shape, which can be done a lot more easily with effective tools like those at Mint.com.

You can quickly and easily put your finances in order, with Mint doing all the organizing and categorizing of your spending on your behalf. By being able to see where all of your spending is going, you’ll be better able to make better spending decisions, which will only have a positive impact on your credit.

Click here for a free trial.

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Source: mint.intuit.com