Of course, if you are one of the people who still distrust the Internet then you can still apply by phone, but let’s count the benefits to applying for a car loan online:

• Less embarrassment. How many times have you sat down to fill out a loan application and needed personal information about yourself that you forgot to bring with you. You either had to leave and go home to get the information or call someone to tell it to you over the phone – while the credit manager sat and watched. No more embarrassing moments. You can fill out your loan application in the privacy of your own home where you already have all the information you need.
• Complete security. Believe it or not, sending information online is more secure than sending it by phone. Phone wires can be tapped and cell phone messages are never secure. However, due to encryption technology, sending personal information online is safe and secure.
• Fewer distractions. Since you are filling out your auto finance application in the privacy of your home with no one sitting in front of you, there are fewer distractions. No credit manager asking you questions and no background noise – unless you turn on your own TV or radio.
• Quick approval. When you apply for credit at most places, you have to wait. But not when you apply online. You can find out if you’ve been approved within seconds.
• Your information is private. All Federal, State and Local laws that apply to personal privacy apply online as well. Your information will not be handed out without your prior approval. Your privacy is protected.

Applying for auto financing online is safe and secure and you’ll get approval faster than applying for credit by traditional means. Super lightning fast!

Most credit information remains on your credit report for a period of seven. The exception to this rule is bankruptcy, which can remain on your report for ten years. If you have unpaid judgments against you then the statute of limitations on those judgments can exceed seven years.

The best way to remove negative information from your credit report is to go back to your creditors and request that the information be removed in exchange for your payment. This is usually very effective. Creditors just want their money.

However, after you remove negative information from your credit report, if you have no new credit then you all you’ll have is a blank credit history. That doesn’t do you much good either. It’s time then to begin building credit to increase your credit score and improve your credit rating. Financing an automobile purchase can be a good step in that direction

If the purpose of purchasing an automobile is to restore your credit, don’t buy a new car. Buy a used car instead. Work your way to the large purchase by improving your credit score first.

Follow these steps to repairing your credit with auto financing:

1. Find a good, trustworthy tote-the-note auto dealer
2. Locate the vehicle you want to purchase (Try to stay within a reasonable range based on your income and credit repair goals; a good rule of thumb is to purchase a vehicle between $1,000 and $2,500 on credit.)
3. Apply for a line of credit for auto financing.
4. Faithfully make your monthly payments on time (Late payments will work against you and decrease your credit score rating.)
5. After making monthly payments for at least six months, you can go ahead and pay off your car loan. The six months of good credit history will improve your credit score. Now you can make larger purchases on credit and get better terms.
6. When you are ready to purchase another automobile, take the vehicle you are currently driving and trade it in on another vehicle. Again, make sure you pick a vehicle in the price range of your budget and credit goals. Don’t get in over your head. That’s how bad credit develops.

It is not always less expensive to purchase a used car. Pre-owned vehicles can have their own hidden costs. For instance, if you buy an older vehicle you may have to pay for constant maintenance, which could be more expensive than purchasing a new car over the long run. Aside from that, a used car can also be more expensive than a new car depending on the make and model and the dealer from which you make your purchase.

The best way to decide whether to buy a new or used car is to research the specs on the individual makes and models in which you have an interest. Don’t just read consumer reports. Although they are helpful, you should also ask your mechanic what kind of issues are typical of a particular make and model of vehicle. If you know, for instance, that a specific auto part is replaced in the majority of vehicles of a particular make and model after five years and that car part is expensive then you might give a second thought to purchasing that make and model of a four-year-old used car.

Financing terms might also be a deciding factor for you. If you can get better terms on a new car than you can on a used car then it could make a difference in your total cost over the term of your auto loan. It’s important to consider all the factors.

Auto dealers themselves can also be a great source of information. Your car salesman can give you the details on particular specs for new and used cars in their inventory. At the end of the day, which type of vehicle you purchase depends on what makes you happiest.

It’s important to understand that you can check your own credit rating at any time. You are entitled to one free credit report annually and you can apply to receive that report online at http://www.annualcreditreport.com.

Your credit rating is established every time you apply for a new loan or seek to rent an apartment. In essence, every time you conduct a financial transaction that is not all cash you are affecting your credit rating. Your rating is also affected any time someone runs a credit check on you. In fact, if you apply for credit too often then you can drive your credit rating down so it’s important that you limit the number of loan applications you put in during a short period of time.

Many used car auto dealers will work with you to help you improve your credit rating. This is done in a number of ways.

1. You might be asked to put up a larger down payment
2. You could pay a higher interest rate
3. You may be required to make weekly payments instead of monthly payments
4. Some auto dealers may require you to pay them directly rather than work through a credit agency or financial institution

Usually, six months of solid and faithful credit payments will improve your credit rating. By find a used car dealer that will work with you to improve your credit you can work up to a nicer vehicle one small step at a time. Each time you complete a pay off on a debt you improve your credit rating.

Get more answers to your credit rating and auto loan questions now.

Having a Large Balance
About one-third of your credit score depends on your ratio of debt to available credit. As a result, the higher balance you are carrying in total, the lower your credit score is going to be. The new CARD Act requires credit card companies to include a graph on how long it will take you to pay off your particular balance if you only make minimum payments. They must also show you how much you would need to pay on your balance each month to pay it completely off in three years. These and other tools can help you lower the balance you are carrying and raise your credit score considerably.

Opening New Accounts
Every time you open a new credit account, you damage your credit score. The amount of damage you do depends on your current score, the type of account you open and how soon you open new accounts after opening others. Companies check your credit when you apply and each inquiry can drop your score by about five points. You can also risk up to 15 points just by applying. These dings to your report are short-lived, but they can mean higher interest rates if you do not wait until they drop off your report before applying for that auto loan.

Not Paying
Other than late payments, defaulting on your credit card balances is the worst thing you can do to your credit. Unfortunately, more and more people are defaulting these days due to the economic problems we are having. These bits of information will follow you for at least seven years, but you can still start rebuilding your credit as soon as possible.

Making Late Payments
Late payments are deadly to a credit score. If you have a good score, it could drop by more than 100 points by simply making one late payment. For people with average credit scores, the score could drop by as much as 80 points. Actually, late payments are the biggest killer for credit scores, yet your score does not increase as quickly by making your payments on time after it has already dropped.

Closing Accounts
When you close your credit accounts, you drop your ratio of debt to available credit. This has a bad effect on your credit score. The actual drop in score varies between cardholders because it depends on how many cards and accounts an individual has and the amount of debt and available credit.

Those are two main killers to a person’s credit score. Be sure to come back to see the other three before you apply for that auto loan!

You just need to know where to look.

Buying a used car is as much about reputation as it is about the product. Investigate the used car dealer reputations in your area and find out which ones are worth dealing with and which ones are worth taking a pass on. This will help you establish a firm network of dealerships and outlets to frequent. There’s no point in wasting your time on a dealership with poor customer service and bad value rankings. 

As you’ve narrowed down your list of used car dealerships, take a friend or family member with you for a second opinion. Browse the car lot, get a feel for the vehicles on the lot and the condition they’re in, and talk to a salesperson. This will help you get a sense of the lot itself and how things operate. Is the lot clean? Are the used cars clean? Do the salespeople present themselves well?

We’ll continue this series with more tips on how to Master the Marketplace in our next entry, so stay tuned!