New National Automotive Finance Association (NAF) Survey Illuminates Industry Trends

In Forth Worth Texas a study conducted between February and April 2014 regarding loan terms suggested that terms are getting longer and scores are getting lower each year. The study was done by the National Automotive Finance Association and used sub-prime lenders as their testing group.

The article covers the key findings of the study addressing them in a comprehensive but decisive bullet format. An auto finance program director named George Halloran of Benchmark Consulting said two-thirds of the people surveyed had a decline in return and a very small percentage had a negative return while some continued being profitable. The survey provided the data from which they were able to determine that loan loss allowance was up by 38 basis points while there was no change to the cost of funds. This indicates the improved collection effectiveness can continue while achieving lower results. The article goes on to provide a fascinating look at the way that younger consumers will affect auto finance but not to worry, for now loan availability is stable.

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How Often Should You Check Your Credit Score?

The two most important aspects of your financial well being are your credit score and credit report. You cannot understand one without knowing the other. You can get a copy of your credit report from each of the the three major agencies for free once a year just by visiting Unfortunately, checking your credit score is not free. Each credit reporting agency will charge a separate fee. You can also get your score from FICO, for a fee. Having said all of that, there is no real guide as to how often you should check your credit score.

Tri-Annual Credit Report Checks..for Free

Let’s start with your credit report. Since you can get it for free once a year from each agency, you should pull it from a different agency every four months. Say in January, pull it from Experian, then in May pull it from TransUnion, and in September you can get it from Equifax. That way you have an eye on you report year round, but each one is still free.

Checking Your Credit Score

Now, on to your credit score. A quick caution: when you pull your credit score directly from one of the major agencies or FICO it is viewed as a soft inquiry and does not lower your credit score. On the other hand, using a third party is viewed as a hard inquiry and will adversely affect your score.

In most instances there is no need to monitor your credit score on a regular basis. By keeping an eye on your credit report, you will have somewhat of an idea as to your score range. Additionally, many major credit card issuers are offering a free credit score tool. Sign up for it. They are provided through a deal with one of the three major agencies and appear as a soft inquiry. Granted, the provided score is only an estimate, but it is a close approximation.

Loan Preparations

The only time you should pay for a credit score is if you are thinking about applying for a loan. In that instance, you should get your score 3-6 months prior to applying. This will give you time to make any adjustments necessary. For instance, if your score is 685, right on the border between an ”Average” and a ”Good” credit rating, you can pay down you credit card debt. This should boost your score by the 6 points needed to be in the higher category, saving you money enabling you to qualify for a lower interest rate.

As you can see, knowing your credit score can be a handy way to save yourself money over the life of a loan, but you only need to pay for it when you are considering a loan.