With auto manufacturers reporting slow sales and gasoline at record highs, anyone in the market for a new car can find some great deals. But before you hit the dealership, you should do a little homework to make sure you can get the best rate on an auto loan.

The single most important thing you can do to get the best rate is to know your credit score at least 30 days before you apply for a loan. This provides you with the opportunity to raise your score if you find out it’s low. Knowing your credit score means you’ll be better aware of the rates a lender will give you. A higher score tells lenders you’re less of a risk because you have a history of responsible credit usage and paying on time. Consequently, you will receive better rates.

You can check your credit score quickly and easily at GoFreeCredit.com. The credit report is free and you can try to credit monitoring service free for 30 days. Use it to monitor any activity and make changes to increase your score, if necessary. GoFreeCredit.com gives a detailed, personalized analysis of your credit report with advice on how to improve it. You can also get information on how to understand your credit report. After the 30 day trial, you can continue the service for a low monthly fee to keep an eye on your credit report and help prevent fraud.

Experts advise checking your credit report several times every year, but checking too often with other services can hurt your credit score. Using GoFreeCredit.com will not negatively affect your score, no matter how often you check it.

When checking your report, it’s important to verify your credit history is correct. No one wants to sit down to discuss an auto loan only to find out a simple error has lowered their credit score, negatively affecting their rate. Examples of common errors include small unpaid balances from long-forgotten credit cards or false accounts opened in your name by someone else.

GoFreeCredit.com can refer you for a free consultation with an accredited credit repair company to help you remove such errors from your report.

The last thing to do before visiting the dealer is to arrange your financing. Most people don’t realize that dealers tack on extra percentage points to the interest rates they offer. Arranging your financing online can save you hundreds of dollars per year.

Just a few extra steps before you start test driving new cars can help you get a great rate on your next auto loan. To sign up for your free credit report and score with unlimited access to your 30-day credit monitoring trial, visit GoFreeCredit.com and check your credit report today.

Dealing with the higher standard for loan requirements since the sub-prime loan industry went belly up, mortgage brokers and auto lenders are becoming more than just financial liaisons, they have stepped up to the role of consumer advocate. Many have helped their customers improve their chances of getting a loan through lawful credit error correction services by working with Lexington Law, the largest credit correction law firm in the nation.
Lenders are using Lexington Law’s credit improvement services to more accurately determine customers’ credit worthiness. Christopher Bruce improved his credit score and financed a new SUV.
The credit crunch is being blamed for more than the mortgage meltdown, it is said to be responsible for a large gash in bank profits. Many lenders are trying to find ways to replace the sub-prime customers that can no longer be approved when applying for a mortgage or auto loan.

“When I came to Lexington Law I did not realize the opportunity to help people; this job is a blessing.” said Wanda Ball, an auto financier out of Georgia. “When I sign someone up and they are hugging me and thanking me - it is amazing for someone to get their life and credit back together.”

But more importantly for the lenders, they are able to see a more accurate reflection of their customers’ credit worthiness - and close more loans. “This is the secret weapon in your dealership arsenal,” said Alton McGriff, Director of Floor Sales at Premier Automotive Group. “I am one of the top closers in the automotive profession, and credit repair is just sexy. I close more car deals, and get more hugs, and invites out for a date (I am a single guy), because I give people the hope that is Lexington Law.”

Te Lawrence, the Financial Services Affiliate Consultant for Lexington Law says that the program was created to help clients accurately reflect their credit risk. “A negative item can stay on your credit report for up to seven years, and that can be extremely damaging to someone’s credit score. We use the client’s rights under the Fair Credit Reporting Act and other Federal laws to challenge these negative items and make sure they are accurate.”

According to the FCRA, if a negative item cannot be verified by the creditor within 30 days, it must be removed by the credit bureau from that person’s report. And since credit history makes up a large portion of the credit score model, the score will usually improve. That makes for some happy, and loyal customers. “It’s nice to know that I have a great legal team, that have the keys to the door leading out of the big bureaus’ flawed system.” says Carl White of Time Mortgage in Palm Harbor, Florida. “The fact that some studies show that 79% of credit reports have mistakes, leaves me speechless. That would be like a doctor operating on the wrong leg over half the time.”

“What’s great about our Financial Services Program is it creates a personal bond between the lender and the customer.” Lawrence adds, “These brokers really want to improve the lives of their customers - plus it means more sales for them. So it’s fulfilling in multiple ways.”

Christopher Bruce is one of the many clients who has written to his Lexington paralegal, “Lexington Law credit repair brought me back into the dealership and away I drove in fully loaded, brand new car. Just like I told Dan, Lexington Law is awesome, and I would recommend them to anyone with credit issues!”

Wanda adds, “With financial peace you have security and you know the feeling of relief, you feel like, wow, I can go out and buy again because my credit is good.”

About Lexington Law Firm

Lexington Law is a general services consumer advocacy law firm that focuses on credit report repair. In practice since 1991, Lexington Law has helped over 1/2 a million clients in their efforts to repair their credit. In 2007 alone, the clients of Lexington Law saw over 602,879 questionable negative listings deleted from their credit reports. More information about Lexington Law’s results can be found out at www.lexingtonlaw.com.

 Q: I purchased a 2000 Acura Integra in April of 2007. The purchase price was $10,409 at an interest rate of 15.99 percent. I paid down $1,000. The loan is for six years at $255 a month. My credit was great at the time I bought it. What can I do to either lower my interest rate or can I get out of it and get another vehicle? The value of the car is now at $7,775.

A: Wow, an interest rate of 15.99 percent with a great credit history? Something doesn’t add up here. From my calculations, you still owe approximately $8,300 on your loan. So, you are upside down on your loan (which means you owe more than the car is worth), but by less than $600. Although being upside down in a car loan is never good news, you are in better shape than some I have seen.

I want to take the time now to congratulate you on making a down payment on your car loan. If you had not made a down payment, your upside- down situation would be worse and you would have fewer options now that you want to refinance or get a different vehicle.

Several factors will help to determine whether refinancing to lower your interest rate or getting another vehicle would be your best option. Let’s start by asking ourselves a couple of questions.

Has your credit history gotten worse since you bought the car, remained the same or improved? Do you have money set aside to use as a down payment for another vehicle? (Keep in mind you will have to make up the difference in the sales price of the car and the amount owed on your loan.)
If your credit history has stayed the same or improved and you decide you want to keep your current vehicle, shopping for a refinance loan might make the most sense. I would recommend starting with your local credit union, as credit unions tend to have better terms for auto loans. You’ll want to do all your loan shopping within a 30-day period so the credit inquiries will be counted together as only one inquiry and will not harm your credit score.

If your credit history has worsened and you have money saved for a down payment, selling your current vehicle and purchasing another might be your best bet. A private sale would most likely get you the best price when selling your current vehicle. You might check out selling it on Craigslist.org or another online site where you can list your car for sale for no cost, but I have seen people have the most success in their local newspaper.
Be sure that you purchase only as much vehicle as you can afford. If possible, it would be best to keep the terms of your car loan to 36 or 48 months. The longer the loan, the more potential you have for getting seriously upside down in the loan again.

When you are shopping for your new loan, make sure you have copies of your credit reports and your credit scores. Do some research before speaking with a lender so you have a good idea of what interest rate you should qualify for based on your credit score. You can find that information at the three major credit reporting agencies — Experian, Equifax or Trans- Union — or at myfico.com. If the lender does not offer you the interest rate you believe you deserve, move on to another lender.

● Todd Ossenfort is the chief operating officer for Pioneer Credit Counseling in Rapid City, S.D., and a board member of the Association of Independent Consumer Credit Counseling Agencies. He answers readers’ questions about debt and credit issues for CreditCards.com. To ask a question, e-mail Editors@CreditCards.com.