How Credit Affects the Car Financing Process
When you have made the decision to buy a car and need to secure financing, the financing process can take different turns depending on where your credit score stands.
University Toyota recommends knowing what your credit score is before shopping for an auto loan. The numbers on the credit score scale indicate the whether your credit score falls within the excellent, good, fair, poor, or bad range.
Depending on your income, work history, credit card history, car loans, or other circumstances, credit scores can either be high, low, or average. While those are important, car dealerships are concerned if you’ll make your car payments on time. Late car payments in the past may or may not give you a slightly higher interest rate.
What Your Score Means
Credit scores affect interest rates, which affects which vehicles are affordable for each person.
The breakdown is simple. If your credit score is in the excellent, good range, you will most likely benefit from a lower interest rate.
- Low numbers in the poor or bad range will indicate a higher rate.
- Fair numbers can go both ways depending on the lender. If this is the case for you, we will go out of our way to find your best options.
Three Tips to Improve Your Credit Score
Always pay your car payment on time!
Have unused credit cards opened to show a strong reputation, but not too many.
Pay at least the minimum on all bills to ensure they’re paid on time.