Whenever you buy a car, always remember that the results of your lender’s credit inquiry will directly affect your interest rates. Hence, it’s very important for you to know your credit rating before getting a car loan.
People who walk into a dealership without knowing their credit score are taking a huge gamble. Cars aren’t exactly cheap, so the last thing you need is to spend more money than you should. Do yourself a favor and check out your credit rating by contacting credit bureaus.
What to look for
Your credit report lists important details such as outstanding debts, late payments, available credit and public records (judgments or bankruptcies). All of these affect your credit score. Check for errors and have them cleared immediately. You don’t need false information to balloon your interest rates.
Some people assume that once they’ve caught up with all their payments, their credit score automatically improves. In reality, this is not always the case. You have to follow up on your creditors to make sure that they report your reconciliation of debt to all the credit bureaus. Otherwise, the blemishes will remain on your record.
Other benefits of knowing your credit score
It’s common for dealers to say to young adults that their credit isn’t good enough. Dealers won’t hesitate to use the fact that younger people have a shorter credit history in order to get people to accept their terms as is. That shouldn’t sway you from looking for a better deal, however.
Remember, minimal credit is not bad credit. As long as you haven’t been delinquent, or if you’ve taken time to repair our credit, give yourself more room to bargain. This is particularly true if you know exactly what your credit score is.
In any case, it’s always best to find your own financing. With your credit score in hand, consult a bank about your possible options. You’ll have more control when financing your new vehicle that way.
Sign up on the box at the right for further assistance in buying an economy car.
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[...] Car loans, mortgages, house expenses and medical bills all figured into the emergencies that credit cards were used as a stopgap measure. For those who know how to cycle through their finances, a credit card simply allows them to space out the payments, rather than have a heavy single-time sum. But with the new regulations, even financially responsible people may be unable to get the credit cards that they need. [...]
Posted on February 3rd, 2010 at 12:58 pm