Lenders use your credit score to assess your creditworthiness – especially when you’re financing a car. The higher your score, the easier it is to get approved for an auto loan, and the better your interest rate is likely to be. Managing your credit before you shop for a vehicle can save you thousands over the life of your loan.
Factors that impact your credit history:
- The number of previous accounts opened and closed
- Your total number of debts
- The length of time you’ve used credit
- How well you’re managing your credit and making repayments
- How much do you use your credit or “credit utilization”
- And many more variables
Tips to strengthen your credit before applying for an auto loan
- Make payments on time and ensure you’re paying the minimum balance each month
- Don’t exceed the limits of your credit cards, and; keep what you owe under 30% of the credit available to you
- Don’t apply for multiple loans and/or credit cards at once
- If you have foreseeable issues, then reach out to your lender or creditor right away
- Periodically check your credit score; you’re entitled to ONE FREE check every year from the big three reporting companies:– Experian, Equifax, and TransUnion
- Have bad credit? Then reach out to credit professionals to help you remove outdated and incorrect information
Why this matters for your next car
A strong credit score can mean a lower rate, a smaller down payment, and more vehicle options within your budget. Taking the time to improve your credit can make a real difference.
Want to learn more about your credit? Take advantage of My Credit Score in Online & Mobile Banking for helpful resources! Check out the articles below to learn what your credit score means, how it affects your life, and more.
Ready to take the next step? Apply for an auto loan today or give us a call at 315-782-0155.