Your credit score matters in pretty much everything you do financially, and it effects different things in different ways. When you are going to buy a car and get financing your credit score matters in a very big way. Your score itself will effect how big of a down payment you should have, what type of interest rate you will be offered, what lender you use, and whether you get approved for an application at all €" among other things. Your loan will effect your credit score in the way that in the immediate future you are adding to your amount of debt, which always makes your rating take a bit of a dip, but over time that will rise back up and if you make all of your payments on time you can really build up some positive payment history and hopefully have raised your rating sufficiently once you have finished repaying the loan.
So in all of these areas you want to consider your credit score when you are thinking about going to get a car loan. The better your rating is the less of a down payment you really need on that loan, and the better interest rate you'll get. The worse your credit score is, however, the more a large down payment will help you get a better interest rate. That down payment helps show that you can manage your money and that you are serious and committed to getting your car loan.
See, the reason that it is hard to get a good deal if you are in a low place on the credit score range is that your low score indicates to a lender that it is risky to lend money to you. You have not likely made your payments on time in the past and that means you are less likely to pay them on time in the future. This opens up a world of problems for them, so they are less enthusiastic about having you as a customer. There are other areas where you can attempt to change their minds on this €" such as a large down payment or a cosigner on the financing.
Your credit score is going to be a major factor when it comes to getting your loan approved, and in getting a good interest rate. For the best deal, you want to have as high of a rating as you possibly can.
So in all of these areas you want to consider your credit score when you are thinking about going to get a car loan. The better your rating is the less of a down payment you really need on that loan, and the better interest rate you'll get. The worse your credit score is, however, the more a large down payment will help you get a better interest rate. That down payment helps show that you can manage your money and that you are serious and committed to getting your car loan.
See, the reason that it is hard to get a good deal if you are in a low place on the credit score range is that your low score indicates to a lender that it is risky to lend money to you. You have not likely made your payments on time in the past and that means you are less likely to pay them on time in the future. This opens up a world of problems for them, so they are less enthusiastic about having you as a customer. There are other areas where you can attempt to change their minds on this €" such as a large down payment or a cosigner on the financing.
Your credit score is going to be a major factor when it comes to getting your loan approved, and in getting a good interest rate. For the best deal, you want to have as high of a rating as you possibly can.
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