What Is Tier 1 Credit In Auto Financing? 5 FAQs
One of those things everyone learns as an adult is about the deep relationship between credit scores and auto financing
. If you have ever had to take out an auto loan, mortgage, or personal loan of any type, you know that your credit score plays a huge role in the interest rate you are offered. While of course it is true that different lenders could offer different interest rates to the same person, there is no mistaking that your credit score is pivotal.Of course, not all credit scores are created equal. Some people have poor credit, while others have good or excellent credit. The pinnacle of all credit considerations is what is known as tier 1 credit. People with tier 1 (tier one) credit scores have certain advantages over others when it comes to auto financing.
If you have ever wondered, "What is tier 1 credit in auto financing?", here are some answers to 5 frequently asked questions (FAQ) about tier one credit:
1. What is tier 1 credit?
A: This term universally refers to that tiny percentage of all consumers who have excellent credit scores. Only a small percentage - about 5% - of U.S. consumers have a credit score in this range.
2. Is the definition the same across all financial companies & lenders?
A: The generally-accepted threshold for an excellent credit score is 770, and well-respected institutions such as Freddie Mac, SmartMoney.com and PBS all classify it as being above 770. However, Fair Isaac considers anything about 700 as being in this illustrious credit category.
3. What are the benefits of tier 1 credit?
A: People with this credit status have much freer access to cheap money, plain and simple. For example, any car commercial that mentions "well qualified buyers" is referring to these folks, and they are always offered the very best deals. Low interest rate loans are easiest to secure by folks in this credit bracket.
4. How does this status affect auto financing?
A: If you are looking to buy a car through auto financing, you definitely will benefit from this "excellent" credit score. Shaving just a few points off of your auto loan could save you thousands of dollars over the course of your loan due to lower interest payments.
5. Is there any downside to having tier 1 credit?
A: There is no specific downside. However, with the easier access to money their credit status affords them, people with tier one credit could potentially fall into the trap of taking out too many loans and getting themselves into trouble. However, this is unlikely given their credit status.
These 5 FAQs can help you understand how having tier one credit affects your auto financing opportunities.
What Is Tier 1 Credit In Auto Financing? 5 FAQs
By: Marie-Claire Smith Auto insurance is imperative Cheaper Automobile Insurance - Get Yours The Correct Way Checking Professional Agencies Of Automobile Extended Warranties Auto Loan Payoff Calculator - 3 Important Items to Have Ready Auto Refinancing with a Bad Credit or FICO Score - 3 Tips Carfax Vs Autocheck Which One Should I Use? What Happens When You Are Injured On A Cruise? Physical Therapy: Why It Is A Good Long Term Solution To Help You Get Over Serious Injury Tips About Renewing Your Auto Insurance Injury Lawyer Dallas-dallas Injury Lawyer-injury Lawyers Dallas Injury Attorney Dallas-dallas Injury Attorney- Car Rental information guide for your Barcelona trip!!! Car Rental Service To Explore The Popular Attractions Of India