If you are planning to purchase a new car and will require auto financing, one of the first things you should do is obtain a copy of your credit report. The information contained in your credit report and your credit score is used by lenders to determine if you qualify for a car loan and the interest rate you will pay on your financing.

Your credit report provides a comprehensive overview of your credit history. It will contain information on account activity and payment history for credit cards you own as well as information on past bank and car loans. Typically yor credit report will contain, four types of information

1. Personal information. This includes your name, spouse's name, social security number, current and previous addresses, birth date and current and previous employers. This data is culled from your past credit applications, so its accuracy is dependent upon how completely and honestly you fill out forms each time you apply for credit.
   

2. Credit information. Included is information regarding each of your accounts with banks, retailers, credit card issuers and/or other lenders. Credit limits as well as loan amounts and balances are detailed, along with payment patterns going back a few years.
   
   
3. Public information. This includes bankruptcies, tax liens and monetary judgments, and, in some states, overdue child support.
   
   
4. Inquiries. Included are the names of those who requested and obtained copies of your credit report.

Aside for your personal information most information does not remain on your credit report forever.

• Positive credit information will remain on your report indefinitely, however information related to specific accounts will drop off your report in seven years if nothing new is reported.

• Negative credit information remains on your report for up to seven years after the date of the original delinquency.
• The length of time for which a bankruptcy will affect your credit depends on which type of bankruptcy you filed for. Chapters 7, 11 and 12 remain on your credit report for 10 years. while Chapter 13 bankruptcies will be deleted from your report after seven years.
• Inquiries are typically drop off your report after one to two years, depending on the type of inquiry.

Your credit report does not reveal any information about your race, religious preference, medical history, personal lifestyle, personal background, political preference or criminal record.

When applying for any type of credit it is important to understand some of the information lenders use in deciding to extend you credit:

• A stable and on-time payment history is viewed positively by lenders at.
  

• A debt-to-income ratio under 35%n is another positive aspect.
  
  
• Too many credit cards or lines of credit are consider bad. The available credit on these cards is viewed as being potential debt.
  
  
• Late payments hurt your rating. The later the payment (whether 30, 60 or 90 days) the more of a negative it will be.
  
  
• Frequent credit inquiries and requests for loans or credit cards can affect your credit score..
  
  
• Numerous changes in address and/or employment may also affect your credit score.
  
  
• Bankruptcies, Repossessions and charge-offs are viewed negatively.

If you find incorrect information in your credit report, you should immediately take steps to correct it. Contact your local credit bureau in writing, setting out the error and including documents that support your position. Make sure your letter lists your name and address. The credit reporting agency must reinvestigate disputed items, within 30 days. The law states that erroneous information, or disputed information that the credit bureau is unable to verify, must be deleted from your file. Even if you're not currently hunting for a car loan, it's a good idea to take a look at your credit report now. That way, problems can be addressed before they have a chance to hurt your prospects.