CREDIT CHECK

What is a Credit Check

A credit check is an assessment that will be undertaken initially by Ford Credit, and passed onto one of the three major credit rating bureaus, to assess whether or not a potential customer is deemed to be a good credit risk or not in terms of lending them the money to purchase a car or truck from Ford.

Ford operate a finance arm known as Ford credit, which offers dealership financing to potential customers who are interested in buying or leasing a vehicle from them. In order to know whether or not the customer is a good risk from a financial point of view for credit will undertake what is known as a credit check on individual.

This involves the individual fully out an application form, which they may do initially online or at a Ford dealership, which will detail a significant amount of personal and financial information about them.

What is a Credit Check

If they have a cosigner then the same information will be required but them, and if the purchase is being done on a commercial basis than information may will be sought about other partners or directors of the business.

Once the application has been processed it will be passed onto one of the major credit rating bureaus who will assess it alongside a range of other information that they have obtained through public records about the potential customer.

These records will then be collated into what is known as a credit report, which is a document which effectively evaluates your credit application. On the basis of this evaluation a credit score is generated.

A credit score is simply a number that is set on a scale between two other numbers to show its relevance in terms of being high or low, and thus giving information back to Ford credit as to the opinion of your creditworthiness.

This credit score is then used as a basis for determining whether or not to lend the customer money, and if so, what terms and conditions such as the size of the deposit, the interest rate etc.

What is a Free Credit Check?

A free credit check normally refers to a free credit report. Depending upon where you live, there is normally a legal obligation on  the three main credit bureaus to provide a copy of an individual’s credit report free to them once a year.

In addition, many of the bureaus will also offer the customers the chance to see their credit score, but this is normally something they charge for.

Having a look at your credit report is actually a very sensible thing to do, especially if you are thinking of applying for any type of auto loan with Ford credit or any other type of finance body. The reason is simply that viewing a copy of your credit report allows you to check that the information contained in it is accurate and up-to-date.

The credit report contains a significant amount of information relating to the individual’s credit history, their credits transactions and their financial health generally.

Free Credit Check

This information is used to assess the credit bureaus interpretation of the customers creditworthiness, for allocating them a credit score that is then used to determine whether or not to lend the money and if so on what terms and conditions.

Some people also worry that when they apply for a loan this has a negative impact on their credit score. Generally speaking this is true, as certain factors affect the credit bureaus interpretation of a customer’s need for credit.

If someone is continually applying for loans and either be accepted or rejected it can tell the credit bureau a loss about that customers credit habits.

When applying for an auto loan with Ford credit or any other lender this does not apply. Made credit bureaus expect you to get quotations from  alternative lenders in order to be able to compare them on a like-for-like basis.

This means that if you are applying for an auto loan, then it is a good idea to obtain tones of quotations from other sources in order to be able to compare them. Normally two or three alternative quotations should be sufficient.