Credit Scores Affect Your Car Deal

car deals - credit scoreYour credit score is a numerical representation of your credit history report, which includes details of all your credit accounts and loans, and how good you’ve been about paying them. It also reports any defaults, repossessions, or bankruptcies.

Credit scores, which for most people falls between 400 (poor) and 800 (excellent), are a major factor in determining the cost of buying or leasing an automobile.  It determines what interest rate you’ll pay, or even if you can get approved at all. It also determines if you will be allowed to take advantage of special new-car incentives, such as 0% APR loan and lease offers.

You have three credit reports and credit scores, one set from each of the three major credit agencies in the U.S. — Equifax, Experian, and TransUnion. When you buy a car with a loan, or lease a car, the dealer and finance company checks your credit score with one or more of the three agencies. Scores can be slightly different (sometimes, more than slightly) from each agency and you can’t control which agency a dealer or finance company uses.

You also can’t control how individual lenders interpret your credit score.  For some, a score of 700 is considered an excellent score; for others, 720 or higher. A score of 620 might shut you out of a deal with one finance company, but allow you to squeeze by with another, although at a high “subprime” interest rate.

If you don’t know your current credit score, it’s easy enough to get it. What’s your FICO® Score? Find out now when you check your credit report for $1 with enrollment in Experian CreditWorksSM! You’ll see what dealers and lenders see when they make decisions about your credit worthiness.

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