subject: Your Credit Score – The Driving Force In Buying A Car [print this page] Many people need a loan in order to buy a car and if you happen to be one of them you better make sure your credit history is sound. This might not come as surprise but you should still look in greater detail at some of the common facts surrounding the credit score: how they can influence your loan interest and amount of money you can borrow.
Knowing exactly where you stand and the type of loan you could qualify for is absolutely essential before buying a new car. There are a few reasons for this. Firstly, it's a no-brainer that car salesmen will try to take advantage of you and pocket the biggest commission they can get from you. Therefore, you should have some rough idea of what your monthly payments will be and the commission you will have to pay on top of the car's value. Challenge the salesmen and make sure you are not being taken advantage of.
In addition, for whichever reason you are buying a new car, you don't want to make a wrong purchase. Even though it often comes down to personal preference, a poor credit score can limit your choices considerably. Too noisy, too basic, too small, the list can go on. If the outlined features don't make up the car of your dreams, perhaps tidying up your credit report could do the trick? If you think you should give it a go then take a look at your credit score and subsequent credit history as there are a number of factors you might need to consider before committing your money.
To start with, get your free online credit report. The information it compiles includes your current address and past addresses, the amount of debt you carry, what kind of debt it is and the lenders' names. It also shows your debt payment history, how often credit report inquiries are made and your history of liens and bankruptcies. All this data is used by credit agencies to indicate your creditworthiness. In general, the lower your score, the higher interest rate you will be charged.
Mistakes can happen and unfortunately credit reports are not without them. They are in most cases related to errors in address or to people with similar names. If there is an error on your credit report it can negatively impact your credit score so you must act swiftly and contact your credit agency which will investigate the item in question within 30 days. That's why it's crucial to check your credit report before the car buying process.
What if your credit report is accurate and your credit score low? The right approach here is to postpone the purchase of a new car for at least a few months. This amount of time should allow you to improve your credit score by paying down your debt and repaying credit cards. While it might be inconvenient to wait for another several months, a resulting lower interest rate will surely save you money in the long run.
Your Credit Score The Driving Force In Buying A Car
