What is a Credit Score & How Does it Work in Buying a Car?
As soon as you get a credit card, take out a loan, or otherwise borrow and pay back money in your adult life, you will be assigned a credit score.
This credit score is comprised of many factors and can impact the way other lenders interact with you from how much they will give your towards house loans to car loans and everything in between.
When you buy a car, your credit score will become important as it will signal to our dealership lenders how creditworthy you are and what kind of payment terms can be worked out. To get a better feel for how to estimate or find out your credit score and understand how it is used in the car buying process, follow along below.
Your credit score is calculated from the various loans and credit you've been extended in the past. It can include obvious items like the timeliness and payment amounts on a credit card or bank loan, but it can also include other less anticipated items like phone payments, insurance payments, rent, and more.
When you find a car you're interested in, you have three options: outright purchase, lease, or receive an auto loan.
If you'd like to find out your credit score before you begin the car financing process, you may be tempted to reach out to one of the credit bureaus to inquire. Beware that the scores between these bureaus differ (as the lenders that report to each of them differ) and it could potentially be costly (depending on which service you use to check).