Pursuing a major loan in any economy can be a difficult task, especially for those with low credit scores or a bad credit history. Being prepared and educated about your own credit score could help immensely when nervously awaiting the financing rate from a sales associate.

First and foremost, take the time to review your FICO Credit Report online. As a consumer, you are eligible to one free credit score report a year. You can obtain your credit score online at any of the three major lenders websites: Equifax, Experian, or Trans Union. Your FICO credit score does not get negatively impacted when you order your own personal credit report.

Upon receiving your credit report, you should meticulously analyze and check the findings. Being aware of what is listed on your credit report can also help you make improvements towards it. Errors often are apart of the reason for a poor credit rating and can be corrected and improved to help raise your score. The best way to improve your credit score is to pay your bills on time and manage your credit wisely. If you foresee a problem in making ends meet, contact your creditors or seek out a credit counselor. Also, try not to max out any of your credit cards as this will result immediately in a lower FICO credit score. Lastly, do not close any accounts or attempt to open multiples ones as well.

Understanding what your credit score means will allow you to see how it affects your future loans. FICO credit scores can range from 300, being the worst, to 850, a perfect score. Generally, the higher a credit score, the lower the interest rate a financial institute will offer. Consider the following categories in helping understand where you and your credit score stands in a financiers eyes: “Excellent credit risk”, your score is above 800, “Very low credit risk”, your score is between 750 and 800, “Low credit risk”, your score is between 700 and 750, “Moderate credit risk”, your score is between 650 and 700, “High credit risk”, your score is between 600 and 650 and lastly, “Very high credit risk” your credit score is below 600. Someone new to the market could have “no credit” which is better then having very bad credit, because it would allow for them to open a new account and manage their credit effectively.

Knowing your credit score can give you an advantage when pursuing a loan and put you in the driver’s seat for bargaining with the financier. If you know your credit falls in the “Fair” category you are considered to be a moderate credit risk, which may impact your chances of being 100% financed with zero down. Providing a cosigner or down payment could further help your chances at obtaining a loan and better rate. Being aware and actively checking your credit score once a year will help enable you to balance the negative and positive effects on your credit. It will also allow you to account for any possible mistakes or errors and begin to fix them immediately.

Author Bio: Cassandra Fatigate is a staff writer for CyberLead, inc http://cyberleadinc.com specializing in auto sales leads http://www.carcredit.com delivering quality car loans for ten years http://www.carapproval.com The webs best Bad Credit Auto Loans

Category: Finances
Keywords: credit score,free credit score,credit report online