0% car financing only good for people with good credit ratings

Consumers, who plan to buy a new vehicle with 0% financing, better make sure their credit rating is good. Otherwise, they’re ineligible for the enticing deal.

Several car manufacturers, led by General Motors, are offering free finaning as a way to spur vehicle sales in the aftermath of Sept. 11.

While the offers seem to be working (October car sales have been at record levels for the year) the 0% financing is only available to those with strong credit scores.

"The 0% financing can save car buyers between $2,500 and $5,000, so now is a great time to buy. However, consumers need to have good credit histories in order to qualify," Ed Ojdana, president of ConsumerInfo.com, one of nation's largest providers of consumer credit information.

He says most car companies are looking for credit scores of 700 and above when they offer the best interest programs.

Scores themselves range from 400 to 900 and are based upon 90 different variables in a consumer's credit report. Those having scores in the 600 range may not qualify for the best rates. Those on the 400's may not receive financing offers at all.

Mr. Ojdana offers the following tips for added score power:

* Make sure there are no inaccuracies in your credit report. You can access your report on the web at QSpace.com or Homestore.com for under $10. You can add your credit score for another $5.

* Make sure you have no current delinquencies.

* Cancel credit cards you don't use - even a zero balance shows "potential, unused debt." Two to four credit cards are the optimum number of cards to have.

* Make sure you are not over the limit on any credit cards.

In addition, over the long term, consumers should make payments on time and, preferably, with more than the minimum payment due.