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Bad credit car loan applicants should check their credit reports first as they can raise their FICO scores by disputing the errors they find and having that same information corrected on their credit reports.

Boosting your credit score

At Auto Credit Express, we are in the business of working with our applicants to help reestablish their car credit and improve their FICO scores by financing either a new or a newer pre-owned vehicle with a bad credit car loan through high risk lenders. At the same time, we try to educate our applicants on the loan process, since a poor decision can either lead to visiting the wrong dealer and failing to obtain a car loan, or paying too high an interest rate.

What many bad credit car loan applicants don’t realize is that by planning ahead  and reviewing their credit report a couple of months before applying for an auto loan, many of these same consumers could boost their FICO scores and possibly qualify for a lower interest rate by simply correcting the inaccuracies found on their credit reports. To that end, here are the steps that need to be taken in order to do this.

Step one – request a copy of your credit report

Before you can review your credit reports from all three bureaus (and you should have all three – Equifax, Experian and TransUnion) you must first order them. All three reports can be ordered online, for a fee, from a service such as freecreditreports360.com or you can do it yourself by contacting each of the credit bureaus individually.

Step two – review the reports

Once you receive copies of your reports (you can usually retrieve them online), print out a copy of each one and carefully review the information that they contain. The length of time negative information stays on your credit report can vary. Here are the durations of some of the most common items:

Tax liens – Tax liens can appear on your report indefinitely if they aren’t paid off. Once paid, this type of lien can appear on your report for a period of 7 years from the date the last payment was received.

Bankruptcy filings – A bankruptcy filing record expires 10 years after the filing date. Each account record that was included in the bankruptcy can remain on your credit report for a period of 7 years from the date the bankruptcy was discharged.

Charge-offs, collections, closed negative accounts, foreclosures, late payments and repossessions – Each of these negative record types can appear on your credit report for 7 years. In the case of collection records, the expiration takes place 7 years after the last 180 day late payment that led to the account being sent to collection.

Inquiries – Inquiry records include such things as requests for credit or loan applications and can remain on your credit report for 1 to 2 years.

Review all your credit information for items such as crossed or duplicate information, records that should be expired, as well as for data errors and fraudulent information.

Step three – write a dispute letter

When writing a letter disputing information contained in your report, be sure to include your name and address, a copy of the credit report listing the inaccuracies as well as any supporting material you may have (copies of account records, statements and correspondence).

Step four – file a dispute

All three bureaus offer an online dispute process, while Equifax and TransUnion also allow you to mail in your dispute. When filing a dispute, either by mail or via the web, be sure to include the identification number located at the bottom of your most recent credit report.

In the credit report listings along with the name of the creditor, you will find the information needed in order to contact the creditor directly – by phone or in writing. If the creditor follows up and indicates that the information was incorrect, make sure you get this in writing. Also, be sure to keep all paperwork that involves these disputes. In the event that the creditor continues to report the wrong information, you can send it to the credit bureau to have it removed. You can also present it to a loan officer as proof that the information contained in the credit report is incorrect.

Step five – track your results

Equifax, Experian and TransUnion, by law, have 30 days in which to investigate and make changes to your credit report following the filing of a dispute. Once the investigation is complete, they will inform you, by letter, of the information was and was not changed as a result of the dispute process.

Step six – do a final review

Once you have completed the dispute process, you should again order a credit report from each of the three bureaus. Once you receive them, check to make sure that each of the reports reflects the changes that should have been made as a result of your disputes.

Once you’ve finished, we can help you get started

For nearly 20 years, Auto Credit Express has been helping people with credit problems get approved for new and used car loans. Our dealer affiliates work with a broad spectrum of bad credit auto loan lenders to get you approved. Since our inception, we have processed over 1,000,000 online bad credit auto loans and closed over 1 Billion dollars in auto loans.

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