Credit FAQ for car buyers

Where do credit scores come from?

Your credit scores are generally based on information in your credit reports. This information is reported by your creditors to credit reporting companies. The three biggest are Equifax, Experian and TransUnion.

Where can I check my credit score before I apply for a car loan or financing?

It is a good idea to check your credit report before applying for a loan or financing. Mistakes in your credit reports could hurt your ability to obtain a credit approval, so check them regularly. You can get one free credit report from each of the big three credit reporting companies every 12 months. Go to annualcreditreport.com or call 877-322-8228.

Why do I have more than one score?

You can have more than one score, because:

• Finance companies and banks use different scores for different products.
• There are many different credit scoring formulas.
• Information can come from different credit reporting sources.

What are some ways to improve my score?

Improving your score is dependent on your personal financial situation. Some general tips that work for most include:

• Pay your bills on time, every time.
• Don't get close to your credit limit.
• Establishing a long credit history will help your score.
• Be careful closing accounts.
• Only apply for loans and credit you need.

For more information about managing and improving your credit score, http://promotions.usa.gov/cfpbpubs.html

What should I look for in my credit report?

• Mistakes in your name, phone number, or address.
• Loans, credit cards, or other accounts that are not yours.
• Reports saying you paid late when you paid on time.
• Accounts you paid off that are listed as open.
• The same item showing up more than once (like an unpaid debt).

How can I fix mistakes on my credit report?

If you find something wrong in your credit report, you may contact both the credit reporting company and the creditor that provided the information. Explain what you think is wrong and why. Include copies of documents that support your dispute. Your credit reports will come with instructions on how to dispute mistakes or request a fraud alert.