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Archive for July, 2014

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Before you even come to Freeway Chevrolet, it’s a good idea to understand your credit and how it may affect the next car you buy.

To get the best rate on auto loans, you need to have good credit. Lenders look at your credit history to determine how much – or how little – risk you pose to them when you borrow money. Your credit score gives them a good idea of if you can be trusted to pay a loan back in a timely manner. The higher your score, the more trustworthy you are in their eyes and the lower interest rate you’ll have to pay. If your credit score is poor, the lender can charge you higher interest or not even offer you a loan at all!

Unfortunately, many car buyers don’t think about their credit score until they are on the lot, shopping for a vehicle. This isn’t the time to wish you had a better credit score, as it can take months to improve. Your best bet is to always be mindful of how your financial decisions impact your credit score and always be working to get – or keep! – a higher credit score.

You can only make a plan for getting better if you know where your credit stands now. You can pull your credit score for free once a year, but in order to see your credit score (also known as the FICO score), you’ll have to pay about $20 per credit bureau. There are three credit bureaus lenders use to get your credit information. A great resource is Avoid “free credit report” sites as they typically don’t share the scores your lenders will use. If your FICO score is 760 or higher, you’re doing great! Below that and you might want to work toward improving.

Once you’ve pulled your credit reports, you will want to double check them for errors including fraudulently opened lines of credit and payments incorrectly marked as late. Fixing this with your lenders is the first step to better credit. More than a third of your credit score is based on your credit history (were your payments in full? Were they on time?). Paying back any missed payments will give you the opportunity to reach out to the credit card company and ask if your account can be adjusted to show no late payments.

The remainder of your credit score is based on the amount owed, the length of your credit history, if you’ve recently opened a new line of credit and the types of credit you have. Taking all of these factors into account help keep you mindful of your credit score.

Knowing your credit score before you begin vehicle shopping allows you to get rate quotes from various auto lenders. It also helps you better understand what your budget is for a new or used car. It’s easy to be pre-approved for a loan at Freeway Chevrolet. Learn more about auto-financing and pre-approval before you come in to test drive!