Credit Scores and Car Loans: How Your Bottom Line (APR) Is Determined

How a Good Credit Score Can Save You Big Bucks (But a Bad One Doesn’t Mean You CAN’T Get a Loan)

 

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Today, the best credit score will get you an average APR of 3.336%

 

The importance of a good credit score can’t be understated when applying for any type of loan, but the particulars of loans vary depending on whether you’re buying a home or — in this case — a car. To get the best car loan rates, many experts would advise making sure you have an excellent credit score, minimal debt and a hefty down payment.

Although that’s true enough, it can be easy to get confused about credit scores and interest rates.

You might often hear that a score of 700 or higher is an excellent credit score, but what interest percentage that equates to is unclear. The fact is, the value of credit scores is relative and depends on the lender’s standards for creditworthiness.

Get a better understanding of auto loan rates by credit score so you can adapt your financial strategy to get the best rates possible.

Keeping Score With Your Credit

To better understand what you bring to the table, find out what your credit score is. Thanks to the Fair Credit Reporting Act, you’re entitled to receive a free copy of your credit report once each year from the national credit reporting bureaus — Equifax, Experian and TransUnion. Many credit cards now offer cardholders free access to their credit scores.

Your credit score is determined by five different elements of your financial behavior:

  • 35 percent based on payment history: how consistent you are about paying your bills
  • 30 percent based on debts owed: how much you owe on credit cards, loans and other types of accounts
  • 15 percent based on credit history: the length of time you’ve actively used credit
  • 10 percent based on new credit: how many new lines of credit have you opened
  • 10 percent based on types of credit: how many type of credit you have, such as revolving credit or installment accounts

The Higher the Score, the Lower the Rate

People who have higher credit scores are considered less of a risk — that is, they’re more likely to pay back the full amount of their loan on time — than those who have lower scores. Lenders reward these lower-risk consumers with lower interest rates. The credit score, in effect, grades a pattern of behavior and, based on this grade, interest rates are determined.

Because there are three credit reporting bureaus, you actually have three credit scores and three credit reports, each of which might differ from the others. If you get scores of 780, 707 and 804, don’t panic; there will always be minor discrepancies among your scores and reports due to the bureaus’ individual reporting criteria and scoring model. But in this case, the scores are close enough to indicate that your credit is excellent.

The same principle applies when it comes to determining the interest rate you’ll get based on your credit score: Generally, the higher the score, the lower the rate, and vice versa. For instance, MyFICO.com breaks down its credit scoring and corresponding APRs for a 60-month loan on a new car into six categories:

Score Range APR
 720-850  3.336%
 690-719  4.66%
 660-689  6.753%
 620-659  9.399%
 590-619  13.719%
 500-589  14.806%
*Rates as of 8/30/2016

How Low Can You Go?

When it comes to securing an auto loan, always try to settle for less — in terms of APR, that is. One way to help yourself get a better interest rate on an auto loan is to print out your credit score and bring it with you if it ranks in the top tier; this could help with bargaining power. It also lets the dealer know that you’re aware of your score and what that means in terms of getting an appropriate APR.

In addition to your credit score, there are other factors that can affect the interest rate you get. Some of these include how old the car is, your debt-to-income ratio, down payment and the length of the loan term.

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The type of car you buy will also affect your APR

Because used cars depreciate — that is, they lose their original value — interest rates for loans on older cars are higher than they are for new cars. This depreciation causes a lender to be less eager to lend money to used-car buyers.

At Chase, for example, the average interest rate on a 48-month loan for a new car is 2.89 percent versus the used car’s rate, with the same terms, which is 3.19 percent.

Debt-to-Income Ratio

Like your credit score, lenders also use something called a debt-to-income ratio to estimate your ability to pay a monthly loan. You can figure out your DTI by adding up your monthly debt — including loans, utilities and rent or mortgage — and dividing that sum by your gross monthly income.

Your interest rate decreases as your debt does, so it’s not a bad idea to pay off as much debt as you can before applying for financing.

Length of Term

An auto loan term refers to the time you have to pay back your loan. Simply put, you make monthly payments until the loan reaches the end of its term. Most loan terms come in a variety of lengths, such as 60 months, 48 months or 36 months.

Generally, new cars with shorter terms also get lower interest rates. The downside to shorter terms is that monthly payments are higher. If a buyer can afford bigger payments, then he’ll end up spending less money on interest than he would with a loan with a longer term and lower monthly payment.

Down Payment

A sizable down payment signals to lenders that you’re a less risky bet and it might even help you get a lower interest rate. The opposite is also true: Those with a small or no down payment who are asking to borrow a large sum of money are a greater possible liability for lenders. Only putting down a small down payment can lead to higher interest rates, which lenders put in place to mitigate any potential loss.

 

Fitting In Or Staying True to Your Vision? How Yacht Got It All Wrong (But Not In the Way You Think)

 

 

Using PornHub as ad space was clever. The first time. When Diesel did it in January.

Nicola Formichetti, the high-end denim brand’s artistic director, told i-D Magazine, “The message is simple: before you jerk off, look at this.”

This is a line Andy Warhol would’ve been proud of. There’s no crying or making excuses in art, people, or marketing – which, some might argue, is one and the same these days.

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Diesel broke taboos to partner with PornHub in their early ’16 campaign

And now, here we are four months later with a different kind of product being peddled on PornHub, except this media stint wasn’t praised for its cleverness.

We’re talking, of course, about the Portland band Yacht (also known as YACHT, but we’re grown-ups here – so it’s just getting one capital letter like all the other proper nouns) and their fake sex tape leak to promote their aptly named song, “I Wanna Fuck You Til I’m Dead.”

Jona Bechtolt and Claire L. Evans, the Yacht duo who also happen to be in a relationship, committed to duping the public, through Facebook posts, stating that their sex tape had been leaked “due to a series of technological missteps and one morally abject person.” Then they wrote this:

Just because we are public figures does not mean we asked for this. Like anyone, we still deserve to have a choice about what we share with the world. Today we no longer have that choice. But our hope is that you fundamentally understand that choice and you choose not to view a private act that was inadvertently made public. We hope you understand that this is not a delicious scandal. This is an exploitation.

The old, tell-them-not-to-look-so-that-they’ll-look routine. Moms have been getting kids to do chores and eat carrots this way for centuries, so what if Yacht does it with a fake sex tape that they ended up leaking themselves?

Regardless of the fact that the whole thing feels like an episode of Scooby Doo for millennials, many people were annoyed that they used revenge porn to get attention. Revenge porn is a serious matter, we all can agree – but then, the best subjects for art are serious matters, right?

At first, Yacht defended their art (I mean marketing, I mean art…), by stating it was a way to “…play with science fiction, the attention economy, clickbait journalism, and celebrity sex tapes all at once.”

When that was met with everything from side-eye to flat out feature-length stories about how much they suck, the band back-peddled and issued a sorry-not-sorry apology, followed by a more sincere, PR-approved one.

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Motormouthmedia, Yacht’s PR company, Tweeted that they weren’t in on the porn prank, distancing themselves from the band as criticism mounted.

 

The internet enjoyed much schadenfreude over the duo’s massive media failure – a true case of animals eating their own, as hip media outlets (places who would do a review on a Yacht album, let’s say) got pretty emotional in their tear down of the band.

Jezebel wrote:

“But most folks probably didn’t try to download it at all, because Yacht said the video was leaked without their consent. Most people are not craven and/or horny enough to watch a video whose participants are begging you not to view it. Most people don’t suck. Most people aren’t Yacht.”

And that was one of the kinder paragraphs in their scathing commentary on the fake sex tape (which, SPOILER ALERT, does not include sex at all – but aliens quietly humping to synth pop).

So here’s the big question: if Yacht was sincere in its art, then should they have apologized? Haven’t artists been pushing boundaries since the invention of art? Isn’t that the point? From Piss Christ by Andres Serrano to Marcus Harvey’s 1995 portrait of Myra Hindley people have been hating on art since…at least the 80s (I should’ve found older examples, but you get the point).

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Members of Yacht, Jona Bechtolt and Claire L. Evans

 

This leads to another question, how much can you trust an artist when they don’t trust themselves? And how does that affect their product?

The media consensus is that the only thing getting screwed in that sex tape is Yacht, the brand. But what if they would’ve been punk rock about it? What if they would’ve just given the finger to the media, stuck by their guns and NOT kowtowed to hipster bloggers because they were offended by something that is pretty inoffensive (we’re talking a fake sex tape with aliens)? My hunch is that they would’ve gotten a lot more respect.

The bottom line is this: by apologizing for their art they A) Never really believed in it in the first place or B) Are willing to do or say anything to be liked. And there’s nothing worse than insincerity in art. Or marketing, even if it is just something to look at before you jerk off.

http://bit.ly/1rLpVxw

EdTech Marketing That Buyers Notice

INFLUENCING THE INFLUENCERS

EdTech, like many markets, is a buyer’s market.

So how can you move ahead of the pack? One way is to get influencers, i.e. popular bloggers, journalists and social media personalities, to pay attention.

While it’s not a cake walk, it’s not impossible either; but you have to abide a few principles.

Check out these 4 tried-and-true tips to add to your marketing strategy today. SEE BELOW.

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*To get an inside look at how to market your EdTech products, join us Wednesday, April 27th at 1 PM PDT, for a FREE 30-minute vidCast with an expert panel. Space is limited, so register today! https://www.bigmarker.com/catapult/Standing-Out-in-a-Crowded-EDTech-Market

Be Form-less.
First and foremost, don’t send a form email. It’s tempting, of course, because there are tons of bloggers and just one of you. A custom email, mentioning at least one specific thing you like about his or her  blog/YouTube channel, etc., will go a long way. It’s the first step in building a relationship, so make it count.

Offer Something
Now that you’ve made nice, bear gifts. If you’d like them to review your product, offer a free sample (or two – one for a friend). If you give their readers or subscribers a gift, like an exclusive discount code, then you’re on your way to becoming Santa Claus. Everyone loves Santa Claus.

You can even offer to guest post. You’re clearly an ed tech expert, you created a product, so pitch a great idea for an article, video, etc. Take time to see what HASN’T been covered and pitch that. Make sure you point out that the topic you want to tackle is something important, but underreported.

Get to the Point
Now ask for what you want. Do you want a review of your product? A backlink to your site? A mention in an upcoming list of greatest ed tech apps? Whatever it is, present your case clearly and concisely. Choose the most compelling reasons why your product will make teachers and students giddy with digital delight.

Target the Middle
If you’re just starting out, don’t go for the titans of social media first. Of course, you can try, but in your quest don’t rule out the mid-level influencers. They have a following and you never know who’s reading/watching their content. Once you have a firm foothold in this world, then you can move on to more prominent influencers or even major media outlets.

Natalie Campisi
VidCast Producer for Red Cup Agency 

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Register for the EdTech VidCast to reserve your spot:
https://www.bigmarker.com/catapult/Standing-Out-in-a-Crowded-EDTech-Market