1. GMC "CAR LOANS" AVAILABLE

    January 2, 2009 by mycarlady

    1/1/09 Las Vegas, NV

    The great auto bailout of 2008 has begun. GMAC has announced that they will now offer car loans to consumers with less than a 700 FICO score. WOW.  The reality is that the Big 3 have ignored dealers pleas for financing their customers, because a) they had no money to loan b) not giving car loans would pressure congress to give them the bail out cash.

    They got the cash, so now everyone with a 621 or HIGHER FICO score can get a car loan. Right? Wrong.  What they don’t say is now that they have a BANK CHARTER, will they use the FICO AUTO credit score, which heavily factors the consumer’s car loan payment history, or the “middle” score of all three credit bureaus, a general average of how the consumer pays all his/her bills overall?  The later could prove to be more beneficial to the car buyer with spotty car payment history but solid mortgage payment status.

    However, those individuals with housing foreclosures, bankruptcy. medical or heavy credit card debts  but good car payment records, could get tripped up on the “middle” score.   The winners will be the credit report repair companies that traditonally fix all three bureaus errors, with no particular attention to risk factors of FICO AUTO scores.  Add to that issue, many car loan companies have a credit bureau preference, which could affect which car a consumer seeks out, based on the credit bureau he/she shows more favorably.

    Dave Smith recently purchased a Mazda3 with a 650 Equifax credit score. Having been offered a 17% interest at the Toyota dealership, where his TransUnion and TRW AUTO scores were lower than 650. “The Toyota dealership said their banks like certain credit bureaus and those were not the ones I was highest one. The interest rate on the Mazda3 was 12.99%,” Smith added.

    GMC needs to make public, exactly which 621 FICO they will use going forward, the AUTO score or the MID-score of the general report. I’m betting they stick to the auto score, as it assess the likely default risk more accurately. Let’s face it, houses can’t be driven across the border (most of the time).

     

    Want to compare rates? CLICK here.

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    Sarah Lee is a veteran of the automotive industry. She writes on all areas of car and consumer subjects. Her company My Carlady helps save you thousands of dollars and time buying your next car. You can reach her at sarahlee@mycarlady.com

    Category: AUTOMOTIVE, CARS I OWN, CHRYSLER, GMC, WOMEN CAR BUYERS
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  2. Fixing Your Credit. Fact or Fiction Part II

    December 27, 2008 by mycarlady

    FIXING YOUR CREDIT, Part II.

     

         There are several variables to consider when deciding how best to clean up your credit. Cost, Time and significance of the issues at hand that have driven your credit FICO score down, will have bearing on what will and won’t work.

     

    First, let’s set one thing straight, Child Support, Federal Tax liens and Student loan defaults are not coming off your report unless you pay the charges. You will need a CPA or Licensed Enforcement/Registered Agent to discuss payment of these charges, cancellation or reduction of fees and a payment plan.  Once you have an agreement in writing from the respective agency, you can provide this to the credit reporting companies to reflect any change of status on the bureau.

     

    TERMINOLOGY: Debt consolidation, reorganization or negotiation all mean the same thing. Someone is trying to “work a deal” to discount the amount you owe.

     

    Credit Report REPAIR, means someone is disputing information on your credit report.

     

    1.  IF you need to have Debt negotiation, consolidation or reorganization done, you may want to consult a Bankruptcy attorney FIRST, before entering into service contracts that promise to eliminate late charges, cut owed amounts in half or “Settle for pennies” on the dollar.  These settlement companies, often disguised with not-for-profit sounding names, charge HUGE fees and will typically advise you NOT TO PAY any owed amounts, as they negotiate with the companies.  This will destroy your credit score (for many years) and most of your hard-earned money could be going to make small installments or toward the retainer for the attorney. (Part III How to Pick a good BK attorney.)

     

    In the current state of mortgage foreclosures, you should certainly consult a real estate/bk attorney before engaging a thrid party credit company to handle your mortgage discussions.  Third party dedt consolidators can entangle your financial situation and make it more costly and difficult for an attorney or mortgage company to negotiate with you.  Get the big messes addressed first, then the credit card and revolving debt can be addressed with certainty or be included in a Bankruptcy.

     

    2. CREDIT REPORT REPAIR. These firms use a system of demand letters involving carefully stated facts; Fair and Accurate Credit Transactions Act (FACT Act), and the FDCPA (Fair Debts Collections Practices Act allow for the appropriate dispute of specific “errors and ommissions”, creating a system in which to demand the credit reporting agencies fix or remove the “stated” errors within thirty days. The information must be reviewed, considered and responded to in a timely manner, and the credit report repair companies continue to contact the TRW, TRANSUNION and Equifax office, until a satisfactory reply is received. In many cases the information is removed outright. Sometimes more information is required from you on the disputed claim and testimonial information is required to vet the request to remove. This is not a quick fix, but steady, concentrated effort will show incremental changes. Over time, removal of these “issues” can boost the credit score accordingly. It is important that you speak to someone at the company, once they have viewed your report, to be clear on what items can be disputed and what the factor value will be on the overall score improvement. Beware of special “online” freebies for signing up NOW.  If it sounds too good to be true, thank the copy-writers, it probably is.

    Many such companies offer NO RISK, money-back guarantees, but you should read the fine print, as costly surcharges can be levied if you demand a refund. Many companies offer payment plans, which must be reviewed for interest and pre-payment penalty charges.

     

    This may seem like common knowledge, but many folks who find themselves in need of these services are often looking for a quick fix, failing to check these promises out thoroughly, with dangerous repercussions.

    If you would like information on specific companies I know of, please email me at: sarahlee@netadlinks.com

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    Sarah Lee writes about all everything cars. She is the author of: The complete Internet Car Buying Guide, Teen Drivers; what every teen & parent should know before driving or buying a car. A 20+ yr. veteran of the automobile industry, she seeks to be the ultimate car consumer advocate. Are you looking for a no hassle deal on your next car, new or used: You can email her at: sarahlee@mycarlady.com

    Category: AUTOMOTIVE, WOMEN CAR BUYERS
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