Simply Professional Credit Consultation: October 2015

Thursday, October 22, 2015

The Top 3 Auto Loan Banks For Bad Credit

Before we get started, I want to say that I have put together this list of banks based on my experience in the auto industry. During my 4 years of experience, I have been in sales, finance, and management. During my sales time, I sold over 500 cars and 65% of those sales were to customers with credit scores under 650. I know the banks that bought majority of the customers with those scores and narrowed them down to the top three. Of course, some people may agree and disagree with this list and that's ok. The purpose of this article is to educate consumers on some of the choices out there. I would like to also point out that I am not getting paid to promote these companies and I genuinely want to see people have confidence when they walk inside of the dealership. Lets get started

1. Capital One Auto Finance

Alright, for those who know me, you all know I am a huge fan of Capital One Auto Finance. This is the only bank that I have seen that will give a person a credit card when they have bad credit or no credit at all, watch the customer make payments on the credit card, and then send them an auto loan approval! Capital One is all about relationships. If you treat them right, you will get treated right as well. Most dealerships worldwide have Capital One Bank on their list of banks that they send applications to. Capital One also offers 1.99% on new vehicles for applicants with higher credit scores of course. Another reason why I love Capital One is simply because they offer refinancing to consumers as well. You won't be able to do refinancing if you are a current customer of theirs as they only this if you are coming from another company. They WILL NOT refinance a current Capital One customer as that is how banks make money.....on the interest rate. This is great for people who have higher rates, they have paid on time, their credit score has increased, and they are looking to lower their payment. I highly recommend them.

2. Credit Acceptance Corporation

There are many banks between Credit Acceptance and Capital One. The reason why this is number 2, is simply the ease of getting a loan with them. They are the ONLY BANK to give consumers an auto loan while they are currently in a Chapter 7 or 13 Bankruptcy, Previous or current repossession, multiple bankruptcies, multiple repo's, Expired or Revoked or Suspended Drivers License, State ID only, Cash income, 1099 Income, Disability Income, Self Employed, Closed Bank account, first time car buyer, low down payments, and a great selection of cars that work with their programs. I think I covered everything lol. The minimum income they work with is $800/month income before taxes. A checking account is not required but does help tremendously with the approval process. Because of the profit margin for the bank and the dealership, some dealerships don't work with them with is the dumbest thing I have ever seen a dealership do as customers with all credit situations come in. I forgot to mention that they also approve consumers with open auto loans in which most banks would force the consumers to trade the open auto loans in a prefer them to have only one auto loan at a time unless there is a co-signer involved. Either way, you get the point. They are awesome.

3. Americredit

This is the final bank on the list. Americredit is very similar to Capital One. Most dealerships and car lots have them as they have been around forever. They are technically 1 of 3 banks. The other two are Ally Bank and GM Financial. Ally is mainly for customers will 640 or above I would say and GM Financial is the main bank for most GM dealerships. Why is this important? Well, most american made cars are GM and for customers living in the U.S will more than likely but an american vehicle. You dont have to necessarily but, when they see that you do, they are more willing to finance one of their own makes and models. Americredit comes in when the consumer can not get approved for GM Financial or it is simply not available if it is a non-GM dealership. This bank normally requires a $1800-$2000/month income, proof of address, and Drivers License that is valid. They normally wont do interest rates past 22%. Once again, a great bank.

The Bottom Line

Hopefully this article was able to shed a light of hope during your car shopping experience or maybe you know someone that may not have the best credit and they are not sure about the first step to take. Located in the article, there are a few pictures that you can click on that will actually take you to an application in which is sent to a dealership near you that work with some or all of banks mentioned in this article. Be sure to share this info with someone you know that can benefit as well.

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Calvin Russell Jr is a Certified FICO Professional, Approved Partner With Bankrate, and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.

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Monday, October 12, 2015

No Credit Or Bad Credit. Which Is Better?

We have all seen the ads "Bad Credit, No Credit, No Problem" right? This normally leads to the question that people always want to know...Is it better to have bad credit or good credit? That really all depends on how you look at it and for what reason you are asking that question. Credit reports are made up many different ways as there aren't two of the same reports. I will explain the pros and cons of having either no credit or bad credit.

Pros of No Credit - Easy To Build

When a consumer is in the beginning stages of building credit, most people don't know exactly how to build credit. Some people follow the famous myth that you must carry a balance on your credit card or pay the bill twice in a month to get double the credit. Because of lack of education, many will just wing it and see what happens if they open a Credit Card Account and make some payments each month. Some people are lucky enough to have parents add them as authorized users on their accounts and eventually create a credit score down the line. But what about those who have No Credit? Isn't not having credit a good thing? Well, it depends on what you are trying to accomplish. If you are trying to get a Credit Card Account, then it would be easy to get approved as Credit Cards are normally the easiest accounts to open and build credit with. If you are trying to get an auto loan, things may be a little tougher and may require a co-signer as you have never had previous auto loan payments to show you are worthy of a loan. There are banks that do offer a First Time Car Buyer Program to consumers who have never established credit before. Keep in mind these lenders will more than likely offer a double digit interest rate along with a required down payment for a reliable vehicle.

Cons Of No Credit - Will Require Some Effort & Time

If you are trying to get a personal or home loan, then prepare to be declined as you need some form of history showing that you can pay and manage your credit bills on time. More than likely, having no credit will result in the lender explaining to you that you will need a co-signer or that you would have to place a certain percentage as a down payment. Even with a Credit Card, the results are not overnight and normally takes 2-3 months or more to generate a score. Keep in mind, just by having a credit score doesn't mean that you can go crazy and start to open more accounts as this will lower your age of credit. A good rule of thumb is to keep a 0 or low balance while maintaining on time payments.

Pros Of Bad Credit - Previous History

How could having bad credit be something positive? It's really quite simply actually. Most consumers, not all, but most have achieved bad credit by a series of bad choices for many reasons. With that being said, many consumers at some point had good enough credit to get approved the accounts in the first place. Because of previous credit history, a consumer has a shot at many "Credit Rebuilding" programs that work with credit challenged clients. Most of these programs dig deeper into previous accounts on the credit report to make their judgement and not just the score itself.

Cons Of Bad Credit - Late/Missed Payments & Derogatory Marks

I really don't have to go over the reasons why bad credit can be....well......bad! I will go over them only because in some cases, even "Credit Rebuilding" Programs won't take a chance on some consumers as they have shown no improvement or effort from those consumers. For example, if the consumer has had multiple accounts with late or missed payments, then more than likely, the lender feels that the consumer will late with them as well. Not to mention the types of derogatory marks including collections, civil judgments, public records, and liens that will show the lenders you may have a garnishment on the way to satisfy a debt owed. Also, with bad credit, the rates are higher than those who may have "No Credit" as the "Bad Credit" consumer shows why they are bad versus never opening an account before.

Bottom Line

As you can see, having No Credit or Bad Credit can be positive or negative depending on what you are trying to accomplish and who you are working with to receive an approval. This post is to simply shed some light on a different perspective as I have seen people on both sides prosper as well as get denied from a lender. This post will also set the right expectations before working with a lender so there are no surprises during the outcome.

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Saturday, October 3, 2015

How To Get A 4-5 Digit Limit On Your Credit Card

One of the most popular questions I get asked is "How do I get a limit increase or big limit on my credit card?" It's really quite simple actually as the banks would love for you to have a higher credit card limit as they think you would swipe more! For those who know me, you know I don't promote debt and I educate on how to manage credit properly. One of the biggest ways of managing your credit properly is to know what your limit is and how you can increase it as well. Lets get to it!

1. Ask For A Credit Limit Increase

Not too long ago, consumers would call their credit card provider and ask for a limit increase. During that process, they would ask the consumer a few personal finance questions pertaining to income and outstanding debts. The conversation usually ended with the consumer consenting to a Hard Credit Report Pull and the financial institution finalizing the approval or decline. The process is similar today, but the difference is that now the consumer can request a limit increase online and some credit card companies have "Soft Pull" technology in which the inquiry won't ding your credit. Usually it takes about 5-7 inquires or month within a 2 year period to show that you are looking for credit somewhere and in that case your score may take a small small dive. Keep in mind, these inquires that affect your score are called "Hard Inquires" as the consumer gives the financial institution permission to get and updated credit report. Either way, hard or soft, asking for a limit increase is the best route to go. Be sure to ask especially if you have made your payments on time for at least the last 6-12 months. This also increases your utilization if your balance is close to the limit.

2. Pay Your Bill On Time Each And Every Month

This may sound like I am preaching to the choir but you would be surprised how many phone calls credit card companies get from consumers asking for a credit card limit increase and they have been late a few times with their monthly payments. If you make 90% or more of your payments on time, you better your chances of getting your request approved for a higher credit card limit.

3. Get A Better Credit Card

When most consumers first start on their credit card journey, they get offers in the mail or email, they then apply, and then of course get approved. The problem is that consumers think that these "Entry Level Credit Cards" will eventually get them into the 3K and above credit limits. Don't get me wrong, there are many card holders with 20K limits and such, but for the sake of this blog, lets keep it simple and easy. My point is that you need a stronger card company or card period as your credit has, or should be, stronger than when you first started your credit card journey. For example, when your score increases, the offers in the mail change dramatically. Companies start offering 0% Balance Transfers and all sorts of perks as the consumer becomes more credit worthy. Usually, those are the credit cards that provide 3K and much higher limits based on payment history, utilization, income, and of course, your credit score. To find a card that offers higher limits to their customers, click here.

4. Bring Down Your Balance

Banks love when their clients use their credit cards but they love it more when the client carries a balance. Carrying a balance means not paying the monthly billing statement in full and only making the minimum payment. If the consumer decides to go this route, the bank will charge interest on that balance for the next month. Also, depending on your balance, the utilization can be too high. Utilization is calculated by the Balance divided by the Limit. An ideal utilization is 30% or less. FICO High Achievers, 760 and above scores, have a 0%-7% utilization. The key is to have access to a lot but not using it all. If this is the case, the consumer will have a much better chance of getting a limit increase as it is not a desperation move based on a high balance.

5. Make A Deposit Towards The Limit

This is popular with consumers that have a "Secured Credit Card" as they are used to making a deposit anyway to obtain a certain line of credit. With an "Unsecured Credit Card", a deposit is not needed to get approved for the card but some credit card companies make let the consumer make a deposit and thus have a higher credit limit. Once again, the consumer has to use raw or liquid cash (real money) to deposit into the credit card company and then receive the higher limit. This is the last option as some consumers would rather not deposit money just to have a higher limit or let alone have the money to do so.

The Bottom Line

Hopefully this post helped you along your journey to a higher credit limit. With these few things, you are bound to get your request approved by the credit card company. I myself was tired of my low credit limit. So I followed these same steps along my journey and before I knew it, I received a higher limit. Be sure to share this with someone that can benefit from this information as well. See you on the way to the #850Club!!!

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