Blog

Are you planning to buy a car? If yes, you most probably are considering a loan. 85% of new car purchases in the country are financed. But when you apply for a loan, you need to consider your credit score.

What Is a Credit Score?

The credit score is a system designed to identify the creditworthiness of borrowers from the perspective of a lender. You can get a score of anywhere between 300 to 850. The higher your score, the better you look to lenders.

A high credit score means getting better rates with lenders. That is because they see you as someone trustworthy.

That said, several factors can affect your overall score. These include: 

• Previous loans
• Length of credit history
• Types of credit 
• Total amount you owe
• History of your payments

If you miss out on payments or do anything that can be deemed risky by lenders, your credit score will take a hit. That would affect your future loans.

Lenders strongly consider your credit score when they make you an offer. That means you will want to take care of it.

How Credit Score Affects Your Auto Loan

The credit requirements for an auto loan can differ from one lender to another. There is no industry standard dictating the requirement for a minimum credit score. 

There are advantages to having a high credit score in applying for an auto loan. The interest rates are better. You can also find better deals on your car insurance which is a requirement for any car owner.

At Car-N-Credit, we work with anyone with varying credit scores. Our team will help you finance the car you need.

Improving Your Credit Score

There are steps you can take to improve your credit score.

1. Pay your bills on time. It may take up to six months to see a noticeable improvement.
2. Do not close a credit card account. Depending on the age of the account, closing it can have a significant effect on your score.
3. Increase your credit line by calling your provider.
4. Work with a credit repair company.

You can also check how your credit score was computed. That allows you to contest inaccurate records like late payments. It also opens the opportunity to work on whatever is causing your score to go down.

Finance Your Car Today

If you need a new car soon, our team at Car-N-Credit will work with you to get it financed. Our credit score requirements are flexible. Contact us today so we can discuss a deal fit for you.