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Few Myths Regarding Auto Loans and Credit Rating Part I

Automobiles have seen some revolutionary changes in their features in the last few years. But one of the major changes that everyone has seen is its demand and availability. It has transformed from a luxury to a convenience and has become a necessity these days. But there are many who cannot afford this necessity. For them, there are auto loans which allow them to buy their personal automobile. These are financed by lenders who approve their applicants on the basis of their credit ratings. Because of their importance, there are several myths which have started associating themselves with auto loans and credit rating. Some of them are mentioned below:

There is a procedure known as credit counseling in which people inquire the counselor on how they can improve their credit rating. These counselors tell their client different ways in which they can improve their score. They might also suggest what rate they might receive on their application for auto loans (judged by the credit rating). There was (and is) a myth that going for credit counseling can hurt one’s credit rating. Researchers have stated that there was no data which could prove that people who did go to counselors were specifically good or bad borrowers. Also, this procedure isn’t referenced in the rating system; therefore going for counseling doesn’t affect one’s credit score.

Also, there might be few lenders who don’t particularly give advice to people seeking counseling and there are few which suggest them higher prices. So, one should check whether a counselor is professional/genuine or not. It is always best to go for counseling instead of sitting and just wishing that all the credit worries would go away by themselves.

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