Before applying for any new line of credit, it’s good practice to check your credit report and credit score. Auto loans are no exception. A credit check will give you a good idea of where you stand and what type of interest rates you can expect. It’s also important that you verify that all of your information is correct and dispute any inaccuracies that may be bringing down your score. 

However, credit scores that fall in the nonprime (620-679) and subprime (550-619) ranges may not necessarily indicate that you aren’t eligible for a reasonable interest rate. Lenders often use different tiers according to their own business needs to assess creditworthiness.

Lenders also frequently place more weight on credit history that is specific to auto loans. Timely auto loan payments in your credit history are more important than whether or not you make credit card payments on time. Always shop around to compare rates before signing an auto loan agreement.  

For more on how your credit score affects car financing, read this article from consumerreports.org
 

Published on

September 25, 2017