How many of you have gone to the auto dealership and been hustled into a loan that seems just too expensive?  How many have found that you needed a new washer or dryer or fridge that has died and found a great incentive to use the “house financing”?  BUYERS BEWARE!  The financing they use could be through a finance company and there are many to choose from, even finance companies that have well respected names i.e.: Wells Fargo Finance, House Hold Finance, Chase Finance and many others.  This can be very deceiving but the facts tell us those finance companies on your credit report, even if paid on time with no lates, as long as you have a finance company on your credit report, your scores are less than what they could be.

So what is a finance company?  A finance company is a company that caters to consumers with less than perfect credit.  Hmmm… so the interest rates are higher, the late fees are heavier and the cost to your credit score is significant.  Don’t do it!  Here is what to do instead.

By going to your credit union or bank before you need an appliance or car and applying for a line of credit or establishing a loan, you can “shop” for your appliance or car knowing what interest rate and charges you are going to get beforehand.  The add-on fees and interest charges won’t be a surprise you because you will already know what they will be.  Don’t tell them you already have financing or you will not be able to negotiate a good deal for your purchase.  Just sign the contract for the purchase and then let them know you already have financing and smile all the way to the bank.

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