How Your Credit Score Affects Buying a Car

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You likely already know that credit is important. You may also know that credit plays a significant role in getting approved for loans and ultimately determines the interest rate you receive. This especially true when buying a new car, as most people receive financing through a lender in the form of auto loans. 

Your credit score will certainly influence your car buying experience. Of course, it’s best to purchase a car with good credit, but for many people, that isn’t always possible. Situations can happen where you need to purchase a car as soon as possible, regardless of your credit. No matter what situation you’re in, 360 Credit Counseling is on your side. In this blog, we explore how a credit score can affect your chances of getting a car loan.

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HOW YOUR CREDIT SCORE AFFECTS BUYING A CAR

Lenders can deny anyone an auto loan if they do not meet specific credit-related criteria. The higher the score, the higher the chances of getting a loan. This is because lenders need the assurance that customers can manage debt and will be able to pay it off in the meantime. Therefore, having any history with the same issue can stand out and be a problem.

UNDERSTANDING DEALERSHIP & LENDER CRITERIA

Each dealership and lender has different criteria. Borrowers should search for low-interest and low credit score dealerships. While a low credit score can hinder opportunities to receive a low-interest rate, it's possible to still get approved for an auto loan. For the best success, select a car you want that is within your price range and find a dealership and auto loan option that offers criteria to fit your unique needs.

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WHAT TO KNOW ABOUT LARGER DOWN PAYMENTS

Car loans can be made easier with a larger down payment. Putting down a larger down payment helps a borrower build trust with a dealer and loan provider. Plus, this will also lower monthly payments over the months to come. Anyone thinking about buying a car should first check their budgeting and see how much they are able to put towards a down payment.

HOW 360 CREDIT COUNSELING CAN HELP

It can be pretty risky for banks and dealerships to make amends on something so accurately monitored. There are many parties involved when an auto loan is granted. Credit reports provide a type of financial insurance, so to speak. Those who do not have a good history with credit scores, should take the necessary steps to improve their credit score before buying a car to ensure they are getting the best option out there. That’s where 360 Credit Counseling comes in. Our services are designed to turn each client’s credit around!

If you’re planning on buying a car and want to ensure your credit is the best it can be, contact 360 Credit Counseling today.

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