Income to Be Used for Credit Card Approvals

Your income may become a more important factor in determining whether you’ll be approved for a credit card, according to a post in the WSJ.

The paper said beginning in February, credit card companies will be required (Credit Card Bill of Rights) to consider an applicant’s income or assets/current debt before extending credit to ensure consumers have the ability to repay.

In preparing for the change, the credit bureaus have already gotten in on the income estimation business, with Experian reportedly nailing down income to the nearest thousand.

They came up with their estimates by matching credit reports with wages, interest, and investment income, along with total credit lines and related payments.

These income estimates will help credit card issuers approve or decline applicants, and may also be utilized to increase or decrease an existing credit line.

In the past, credit card issuers simply asked consumers to enter their gross annual income in a box on the application form, but soon you could be required to provide pay stubs, tax returns, or be asked to fill out a form 4506, which allows the IRS to release your tax filings to lenders (so no fudging the numbers).

What the changes really communicate is that credit scoring has proven to be unreliable, at least as a standalone determinant of capacity to repay debts.

Of course, the income estimates are just ballpark figures when it comes down it, which is why the credit bureaus’ contracts prohibit card issuers from turning down customers based solely on the information.

Read more: Why credit card regulations are worthless.

American Express Cards with No Annual Fee

I like American Express a lot, I don’t hide that fact. Their customer service is stellar, it’s easy to dispute fraudulent/bogus charges, and the rewards tend to be the best in the industry.

Their credit cards also look really cool, and who doesn’t like to look cool?

At the same time, a number of American Express credit cards come with some hefty annual fees, which I’m not a fan of. In fact, some of the annual fees are several hundred dollars a year. Take a took at the Amex Platinum Card if you don’t believe me. Eek. For the record, the Amex Green and Gold credit cards have annual fees as well.

I’ve never embraced the idea of paying a fee to use a credit card, it just doesn’t sit well with me. After all, there are plenty of great options out there that are fee-free, so why pay?

For most people, the annual fee will never be justified by whatever benefits are offered.

Fortunately, even almighty American Express has a number of credit cards with no annual fee, good ones at that. And I carry one of them as my go-to credit card.

That said, let’s take a look at all the “American Express cards with no annual fee:”

Blue from American Express

This revolving credit card from American Express has no annual fee and a 10,000-point opening bonus, which is attractive, though it only earns one point for each dollar spent.

Blue Cash Everyday Card (my personal favorite)

This Amex card comes with introductory 0% APR for 12 months on purchases, “no annual fee,” a great cash-back rewards program, and instant approval in under 60 seconds.

You get 3% cash back at stand-alone grocery stores, 2% cash back at stand-alone gas stations, 2% at major department stores, and 1% cash back everywhere else, with NO annual fee. Pretty good rewards considering the credit card doesn’t come with an annual fee, eh?

For these reasons, it’s my credit card of choice.  By the way, American Express also offers a paid version of the card that offers slightly higher cash back percentages.  Do the math to see if it will net you more money, with the annual fee factored in.

Tip: Apply for the old version of the card and earn 5% cash back on gas, groceries, and at drugstores after spending $6,500 each year.

Amex EveryDay Card

This is the newest American Express card to join the lineup.  It’s very similar to Blue Cash, but instead of cash rewards, cardholders receive membership points, which could extend further when used for travel.

But I still favor Blue Cash because the cash back tiers are significantly higher.

Blue Sky from American Express

If you want a travel rewards credit with no annual fee from American Express, look no further.

The Blue Sky credit card comes with 0% introductory APR for 12 months on purchases, a point-based rewards program, instant approval in less than 60 seconds, and no annual fee!

And there are no blackout dates, no travel restrictions, and the points can be used on any airline, hotel, car rental, etc.  In fact, you can book travel on any website you want, including popular low-cost comparison sites such as Kayak.

Bluebird from American Express

This new prepaid credit card has no annual fee, which rivals most of the prepaid credit cards out there that are riddled with all sorts of fees.

That’s actually their selling point with this new card, making it a contender in the highly competitive space.

Clear from American Express

This credit card was intended to be an easy-to-use, no-fee-of-any-kind credit card – it features no annual fee, no balance transfer fee, and no late credit card payment fee.

Hilton HHonors Card from American Express

This hotel and travel rewards card from American Express features no annual fee and the ability to earn 40,000 HHonors bonus points upon sign-up. Not a bad deal for the frequent traveler.

Serve from American Express

American Express has another prepaid credit card with no annual fee, though this one is aimed at the underbanked youth.

It’s got all types of neat features, including the ability to send payments via Facebook.

TrueEarnings Card from Costco and American Express

If you’re already a Costco member, you can get a Costco-branded American Express card at no additional cost. Essentially, you get two memberships for the price of one.

And you get 1% cash back on Costco purchases!

Fidelity Investment Rewards American Express Card

Credit cards with no annual fee don’t have to be lackluster. Take the final credit card on our list. You get 2% cash back on ALL purchases and that money can be invested in a Fidelity account for even bigger returns.

So there it is, all the credit cards from American Express that come annual fee-free, the way it should be. Should there be any others, they will be added here as well.

Read more: Check out some Amex cards that waive the annual fee the first year.

Why Credit Card Regulations Are Worthless

The problem with imposing new rules on credit card issuers is their ability to quickly circumvent them and come up with new ways to make money.

It’s quite evident if you look at what First Premier Bank, a subprime credit card issuer, has done recently to skirt the impending rule changes set to take effect on February 21, 2010 (Credit Card Bill of Rights).

For example, the First Premier credit card typically comes with a minimum of $256 in fees during the first year for a $250 credit line, but because the new laws limit fees at 25 percent of a credit card’s total limit, it will be lowered.

Going forward, the bank will charge a $75 annual fee for a $300 credit line, but to make up for that lost profit, they’ve raised the APR from 9.9 percent to 79.9 percent.

That’s not a typo, it’s the highest APR tied to any credit card currently on the market, according to an industry analyst.

For cardholders with a $300 balance on the credit card, it equates to about $20 in monthly finance charges; assuming you pay $20 per month, you’d be looking at $315 in fees annually for a $300 credit line. Not a bad haul, eh?

First Premier is reportedly testing the new set-up to see how it works for them and their customers; the ultra-high APR is priced according to the “risk associated with this market.”

Even if they don’t stick to it, look out for similar tricks employed by credit card issuers to make up for any lost profit as a result of the rule changes.

Remember, the credit card issuers always win.

Read more: Credit Card Act II

Watch Out for Credit Card Inactivity Fees

By now, you’ve probably heard about credit card issuers paying customers to close their accounts in the wake of one of the worst credit collapses in history.

But the latest move by card issuers is quite the opposite; some are charging customers inactivity fees for dormant credit card accounts.

That’s right, if you fail to use your credit card for a certain period of time, you may be slapped with a fee (in the ballpark of $20) to keep it open.

Of course, it hardly seems worth paying it, given the fact that most credit card issuers do not charge inactivity fees.

However, some consumers have been led to believe that closing a credit card will do serious damage to their credit score, so they may hold off.

And though your credit score could fall as a result of a closed account, it probably won’t mean a whole lot if it’s a card you seldom use.

Additionally, there’s no reason you should pay a fee to keep your credit card open, regardless of the credit scoring impact.

If you feel you must keep it open, consider using the dormant card to pay a recurring monthly bill such as your gym membership or cell phone bill to avoid the inactivity fee.

Remember, the older the card account, the more value it has in terms of credit scoring, so don’t fret about closing a newer credit card.

And if you’ve got plenty of solid credit history, the “damage” to your score will likely be minimal if at all negative (Should I close my credit card account?).

Tip: Keep an eye out for changes to your credit card terms as issuers look to charge new fees to offset the impact of the recently passed Credit Card Bills of Rights.

Salvation Army Now Accepting Credit Cards

Another sign of the times folks…

This year, the Salvation Army red kettles, often situated outside of department stores and supermarkets during the holiday season, will accept credit cards as a form of payment.

No longer can you use the excuse, “I don’t have any cash on me, just my credit cards.”

Many of the signature red collection kettles will now be outfitted with credit card machines that give donors the option to specify an amount and receive a paper receipt in return.

That’s handy for keeping track of donations for tax purposes, and it may even lead to more money for the charitable organization.

The Salvation Army’s marketing director said the average credit card donation was a staggering $14, compared to just $2 for cash donations.

What a difference plastic makes…

Credit card issuers that receive interchange fees are also likely to profit from the increased use of credit cards, which now seem to be accepted nearly everywhere, from parking meters to valet and beyond.

The Salvation Army said the credit card transactions are being handled by a reputable third-party company and are completely safe.

It’s unclear if both American Express and Discover, as well as Visa/MasterCard-branded credit cards are accepted.

(photo: justinlai)

Credit Card Interest Rates May be Capped at 16 Percent

House Rules Committee Chairman Louise M. Slaughter is reportedly working on legislation that would cap credit card interest rates at 16 percent.

While 16 percent certainly isn’t low, it’s markedly better than the 30 percent interest rates tied to many credit cards these days.

The bill, which is expected to be introduced after the Thanksgiving holiday, is essentially a response to credit card issuers raising rates to offset the effects of the Credit Cardholders’ Bill of Rights.

Those changes, which include the elimination of arbitrary interest rate increases, two-cycle billing, and negative payment hierarchy, are slated to be implemented in February.

But with every new regulation thrown the credit card issuers’ way comes a fresh strategy to make profit some other way, e.g. higher interest rates.

Back in May, an amendment to cap interest rates at 15 percent was shot down in the Senate, so it’s doubtful this measure will see much a different fate.

Regardless of whether interest rates are capped at some seemingly arbitrary number, it’s wise to avoid hefty finance charges by paying balances off in full or utilizing 0% APR credit cards.

If you’ve got a large balance and a relatively high interest rate, consider a balance transfer to a 0% APR credit card or a low fixed-rate credit card for the life of the balance.

You’ll save a ton by avoiding credit card finance charges!

Watch Out for Post Transaction Offers Online

You just ordered a pizza online when a coupon appears before you, promising $10 off your next order.

To snag the offer, all you have to do is hit “next” or “yes” or “continue.” Before you know it, you’ve signed up for a recurring continuity program without even pulling your credit card out of your wallet.

A week or two later, you’ve got a bill for $10 from a company you’ve never heard of; you inquire about the charge and find out that you signed up for it unknowingly when buying another item online.

As a result, there’s a good chance the credit card company will not refund the charge, as it was authorized by you, whether you realized it or not.

These types of offers, that typically occur directly after you purchase an item online, usually when the confirmation page pops up, have generated billions for a handful of companies with Office Space-esque names like Affinion, Vertrue, and Webloyalty.

The worst part about the whole deal is these companies have entered into agreements with top retailers, such as Pizza Hut, 1-800-Flowers, Priceline, Fandango, Classmates.com, Orbitz, and Continental Airlines, that allow them to bypass the need to re-enter credit card information.

So by simply clicking “yes” to the offers, these third-party companies acquire your credit card information and are free to charge you monthly.

Unfortunately, consumers are often led to believe that the offer is coming from the original merchant whom they trust, adding to the misleading nature of the transaction.

My advice is to avoid these “special offers” and navigate those confirmation pages extremely carefully to ensure you’re not signing up for something borderline scammy.

And something should certainly be done to outlaw practices that don’t even require the card holder to provide their payment details; it’s downright irresponsible (Congress is considering it).

What Credit Score Do You Need a Rent an Apartment?

Credit Q&A: “What credit score do you need to rent an apartment?”

Like all things credit, nothing is written in stone here, but obviously the higher the credit score the better (what is a good credit score?).

Apartment shoppers should realize that not all landlords pull credit, but not bank on it.

And even if they do, they don’t necessarily have a certain threshold or particular three-digit number that they abide by.

Each landlord will have their own risk appetite and rules when it comes to credit scoring. In other words, you won’t necessarily be barred from renting an apartment if your Fico score is below 620.

This differs from banks that issue mortgages, which typically have rigid credit scoring tiers in place that are pretty much black and white.

You either meet the credit scoring requirement or you don’t, with few exceptions.

All that said, there isn’t a specific credit score you should aim for, but as a rule of thumb, shoot for the stars.

Landlords May Be More Lenient

With regard to renting, you’re probably going to find more leniency with landlords if you seek out duplexes or guest houses, along with smaller complexes.

Landlords at larger complexes will probably pull your credit for sure and chances are they’ll be more meticulous (and experienced with reading credit reports).

So what if the landlord pulls your credit and finds that it’s less than satisfactory?

In that case, you may need to obtain a co-signer, such as a parent or family member with better credit assuming you fail to meet your obligations.

If that’s not possible, the landlord may ask for a larger down payment (security deposit) as a means to mitigate the higher risk, though this clearly isn’t ideal for the renter.

However, these days you may find that landlords are a bit more lax because they’re just happy to rent their units out in the face of a tough economy.

If you have no idea where you stand credit wise, you may want to order a free credit report before you start looking for an apartment to see if there’s anything negative on your report.

There’s also a good chance you can use that credit report in place of the one the landlord would order (assuming you opt to get the score as well), saving you a little bit of money on that application fee.

This could be especially helpful if you’re shopping around at different apartments and don’t want your credit pulled numerous times (and it could prove to be a good negotiating tool if you’re going up against another candidate).

After all, it saves them the time and aggravation of ordering a credit report themselves.

If your credit score does happen to be low, you can still make an argument as to why you’re a solid candidate for the apartment, so don’t be discouraged.

Landlords Care About Rental History

Generally, landlords will be most interested in any rent-specific issues on your credit report.  Or perhaps a past mortgage delinquency if you’ve now been resigned to renting.

So if you’ve got great credit, other than an isolated late payment on a store credit card or something similar, they may look the other way, even if your credit score is depressed as a result.

From their perspective, you’re a good borrower overall, and you’ve always stayed up-to-date with housing payments, so you won’t be looked at as a huge liability.

Conversely, if there are signs of rental distress on your credit report, including disputes with former landlords, you may denied on the spot.

They won’t want to deal with someone who couldn’t get along with a former landlord, as such tenants tend to repeat their past behavior.

Tip: How to remove negative items from your credit report.

Get Up to 70k Ultimate Rewards Points When You Apply for Chase Ink

It’s time for another credit card review, this time I’ll be looking at the Ink cards from Chase.

This is actually a new credit card line from Chase reserved only for business owners, which the company says comes with business-sized credit limits.

That means credit limits large enough to take care of major business purchases, or alternatively flexible spending capacity that may grow as needed with your business.

This is especially important for small business owners right now with all the credit lines being cut in the wake of the ongoing credit crisis.

Employers can get additional Ink credit cards for their employees for free that earn points in the associated Ultimate Rewards program.  Individual spending limits can also be set for each employee, and spending reports can be generated.

Two Ink Credit Cards to Choose From, Both with Great Sign-Up Bonuses

There are two different versions of the Ink card available, including Ink Cash, Ink Plus, and Ink Bold; annual fees range from $0-$95 (first year free for those with fees).

Ink Cash is a no annual fee credit card that offers a 2% cash back rebate for purchases made at gas stations and restaurants. You also get 5% cash back on cable TV, internet, landline, and cell phone services, along with purchases at office supply stores like Staples or Office Depot (on the first $25,000 spent annually).

For all other eligible purchases you’ll also earn 1% cash back.  At the moment, you can also earn $200 cash back if you spend $3,000 during the first three months from account opening. With no annual fee, that’s money in the bank.

Ink Plus is a little different.  Instead of offering cash back, it offers bonus points in select categories.  For example, you can earn 2X points at gas stations and for hotel accommodations when purchased directly with the hotel (on the first $50,000 spent annually).

Additionally, you get 5X points on cable TV, internet, landline/cell phone, and office supply purchases (same $50,000 annual limit), and one point per dollar spent elsewhere. Ink Plus doesn’t charge foreign transaction fees either, and comes with a very handsome 60,000 bonus point sign-up bonus if you spend $5,000 in the first three months from account opening.

There used to be an Ink Bold, which featured everything Ink Plus does aside from the fact that it was a charge card, not a credit card. That meant it had to be paid off in full each month. You cannot carry a balance. If you do, you’ll be subject to late fees and penalties. However, it also came with a flexible spending limit.

That being said, Ink Bold is best reserved for the business owner who plans to pay off their card in full each and every month.  It’s a good alternative to American Express charge cards because Ink cards are issued by Visa/MasterCard, meaning they’re accepted pretty much everywhere.  We all know Amex is not…

For the record, the points earned with Ink Plus and Ink Bold can be redeemed for cash back as well, or used for gift cards, travel, etc. And you get 20% off travel when you book via Chase Ultimate Rewards, so those 60,000 bonus points are really worth 75,000 points.

Alternatively, you can transfer the points to leading travel partners on a 1:1 basis with no fees.

Travel programs include: British Airways Executive Club, United MileagePlus®, Southwest Airlines Rapid Rewards®, Korean Air SKYPASS, Virgin Atlantic Flying Club, Amtrak Guest Rewards®, Hyatt Gold Passport®, Marriott Rewards®, IHG® Rewards Club and The Ritz-Carlton Rewards®.

This is probably the best use of your Ultimate Rewards points if you like to travel. I’ve used the big sign-up bonuses with Chase Ink to book transatlantic first-class flights for free. Can’t beat that!

And because the points never expire, you won’t have to worry about redeeming them if you’re not quite ready to use them. So you can easily see where it’d be pretty easy to rack up a ridiculous amount of points in a hurry if you use your credit card for your business frequently.

The downside to Ink Plus and Ink Bold is the $95 annual fee, which can be waived the first year. The $5,000 spending requirement for the bonus may be difficult for some cardholders as well, so make sure you’ve got plans to meet the spending requirement before applying.

With all the Ink cards, you used to get complimentary membership to the Lounge Club, which provided access to over 350 airport lounges worldwide. Your first two visits each year were free, after which the cost was $27 per visit, per person.

How Many Points Can I Earn with Ink from Chase?

Let’s look at a real-world example.  Say you apply for the card and meet the $5,000 minimum spend on the Ink Bold or Ink Plus card.  You’ll earn 60,000 bonus points plus another 5,000 regular points (minimum) for spending $5,000.  So you’re already at 65,000 for doing the bare minimum.  If you use the card primarily in the 5X bonus point categories, you’d be looking at 85,000 points after spending just $5,000.

If you transfer the 85,000 points to an airline rewards program on a 1:1 basis, you should easily have enough for a transatlantic flight, possibly even in business or first class if you find a good deal.  Or you could transfer the points to the Southwest Airlines program and take a handful of shorter flights for free.  Think flying from LA to Phoenix or Vegas over and over again, for free.  Or from LA to NYC.

Assuming you max out their $50,000 limit in the 5x bonus categories, you’re looking at 250,000 points annually.  That’s enough to fly around the world a couple times.

Wondering why someone would use points for travel as opposed to cash back?  Well, if you do it right, you’ll get a lot more bang for your buck.  Cash back is redeemed at a ratio of one cent per point.  In other words, 100 points = $1.  And 10,000 points = $100.  But if you redeem points with airlines, hotels, etc., you can get a much better return, something like 3-5 cents per point in value.

So if you do start earning a massive amount of points, make sure you maximize their potential too.  Don’t just assume cash back is the best redemption method.

50,000 Chase Ink Cash Bonus (Targeted)

There have been sightings of a 50,000 bonus tied to the always annual fee-free Chase Ink Cash card. That’s 50,000 Ultimate Rewards points if you’re keeping track.

You have to make $3,000 in the purchases during the first three months to get those points and they can’t be transferred to airlines/hotels unless you also have a premium Chase card such as Sapphire or Ink Plus.

This is definitely a good deal because the spending requirement is lower than the alternatives and there’s no annual fee to worry about.

And you still get 5X UR points in the same categories, just with a $25,000 annual limit as opposed to $50,000.

70,000 Chase Ink Plus Sign-Up Bonus (Annual Fee Waived)

If you’re lucky, you might get targeted for the 70,000 point sign-up bonus in the mail. Even if you don’t, you can go into a Chase bank branch and apply for the Chase Ink Plus card to get 70k points for a limited time.

It’s unclear how long this offer will last, but it might be worth your while to go into a branch as opposed to signing up online because it’s another 10k bonus points. Just watch out for the cross-selling once you enter the bank.  Focus on getting the card and moving on.

You still have to spend $5,000 in the first three months, but you get points valued at $875 (if used for travel rewards). Or $700 if you want straight cash back. Even better, the $95 annual fee is waived for the first year, so what’s not to like. You’ll get at least 75,000 Ultimate Rewards points if you hit the $5,000 bonus spend requirement.

Tip: I recently took advantage of the Chase Ink 70k in-branch offer and was approved right on the spot. That’s another benefit of applying at a Chase branch. You find out if you’re approved immediately. And my Chase banker who is now my buddy gets a commission.

100,000 Chase Ink Plus Bonus (Targeted Mailer)

There was recently chatter regarding a 100,000 Chase Ink sign-up bonus, which was apparently targeted via a mailer to some select (lucky) individuals.

It doesn’t appear to be a widespread offer, though if you did receive it you should probably take Chase up on it.

Aside from coming with a staggering 100k points when you spend $5,000, the annual fee is also waived the first year. Kind of hard to pass that up.

The only card that matches the 100k bonus comes via the new Chase Sapphire Reserve, though that card also has a hefty $450 annual fee. So it’s not quite apples to apples.

There have been mixed reports of Chase matching the 100k offer. If you recently got approved for Ink with a lower opening bonus, a secure message or phone call to Chase might be a wise move to ask for the higher bonus.

However, you might need to provide a unique invitation code to get the match approved. You could also try contacting your personal Chase banker to see if they can get the 100k offer matched.

Why I Have Chase Ink Bold and Plus in My Wallet

I actually applied for both versions of Chase Ink to get two sign-up bonuses. Because why settle for 60k points when you can get 120k points instead?

Additionally, I like the fact that I earn 5x bonus points in categories I constantly use like phone, cable, and internet. I wish they’d give me 5x points on my web hosting, but I guess that falls outside the definition.

The redemption options are also awesome for the Ink cards so I can move the points to Southwest for free flights, or to an international carrier to fly around the world for free. Hotels are also a rewards option, meaning I can book complete vacations for free, using mainly the sign-up bonuses.

Below, I’ve grouped the benefits by type of Ink card. Bold and Plus are basically the same, despite one being a charge card and one being a credit card, so the benefits are pretty much the same.

Benefits of Chase Ink Cash

[checklist]

  • $200 bonus when you spend $3k in the first 3 months from account opening
  • 5% cash back on the first $25k spent in combined purchases at office supply stores, and on cell/landline, internet and cable TV each year
  • 2% cash back on the first $25k in combined purchases at gas stations and restaurants each year
  • 1% cash back on all other purchases with no limit
  • No annual fee
  • Rewards do not expire

[/checklist]

Benefits of Chase Ink Plus/Bold

[checklist]

  • 60k-70k bonus points when you spend $5k in the first 3 months from account opening
  • 5X points on first $50k spent in combined purchases at office supply stores, and on cell/landline, internet and cable TV each year
  • 2X points on the first $50k in combined purchases at gas stations and hotels each year
  • 1 point on all other purchases with no limit
  • 1:1 point transfer to leading frequent flyer and hotel reward programs
  • 20% off travel redemption via Ultimate Rewards
  • $95 annual fee possibly waived the first year
  • Rewards do not expire
  • No foreign transaction fees

[/checklist]

Tip: If you’re not a business owner, Chase Sapphire Preferred offers similar rewards to Chase Ink Plus/Bold.

(photo: Michael Pecirno)

What Credit Score Do You Need to Buy a Car?

More fundamental credit Q&A: “What credit score do you need to buy a car?”

When it comes to buying or leasing a car, good credit is often a necessity, as most of us can’t just mosey down to the car dealership and buy a car outright.

But there isn’t a specific credit score that you need in order to get financing, as that can vary from dealer/financier; not to mention other factors that come into play.

Credit Score Isn’t Everything

For example, you may have a relatively light credit history, but nothing derogatory dragging you down, so your credit score may be quite high.

However, at the same time, if you’ve never supported a large amount of debt, such as an auto loan, car lease, or a mortgage, the dealer may be hesitant to offer you a loan.

This is actually a pretty common scenario. A consumer may think they’ve got excellent credit because they have a high Fico score, but if the only thing they’ve got on their credit history is a few credit cards, auto lenders may balk when it comes to issuing a loan.

So if this sounds like you, it may be in your best interest (or a necessity) to get someone with more established credit to co-sign on the new auto lease or loan.

Past Auto Loan History a Plus

Conversely, a consumer with less than stellar credit may get approved with little difficulty for the same auto loan you wanted just because they have past auto loan history on their credit report.

The way dealers see it, even though that three digit number isn’t quite as high as they’d like, the consumer displayed the ability to repay an auto loan in the past, so a subsequent loan seems reasonable.

However, keep in mind that the lower your credit score, the higher the interest rate will be on the auto loan or lease. So you’ll still want to make sure your credit score is as high as possible to get the best deal.

And many car dealers only pull a credit score from a single credit bureau, such as Equifax, Experian, or TransUnion, instead of using a tri-merge credit report, which uses the median score from all three bureaus.

For this reason, it’s important to ensure that your credit is ship shape with all three credit bureaus, as you’ll never know which one may be called upon for your loan approval.

Tip: The credit score they use may have a special range used exclusively by auto dealers and their associated financing companies.

If your credit isn’t sufficient to get that new car, the dealer will usually work with you to ensure that a sale/lease is completed.

This could involve bringing in a co-signer, such as a parent or spouse with more established credit, or charging a higher interest rate to offset risk.

It’s probably wise to consider a co-signer if the lender/dealer wants to charge you a premium based on your credit alone, or hold off until your credit score improves.

Remember, you can obtain auto loan financing via a bank or a dealer, so shop around.