Cars are used every day by thousands of people. Many workplaces require that their employees have reliable transportation to and from work before they extend a job offer to them.
If you’re in the market for a new car, but you want to know more about your credit score and how that might affect your car search, keep reading! In this article, you will learn why your credit score is important to your car search, what your minimum credit score is, and a few tips on improving your credit score before hitting the car lot.
HOW YOUR CREDIT SCORE MIGHT AFFECT YOUR CAR SEARCH
Although every American has their own credit score, many have no idea what it is for, what it measures, and why it is so important.
Your credit score measures your loans, payment history, and experience with credit cards to help a business like a car dealership learn the likelihood of you paying your car bill on time. The higher your credit score, the more likely it is that a car dealership will give you lower rates and agree to sell you one of their cars.
One important thing to note is that you can be denied services and/or products because of poor credit. This is because a company is risking the possibility of giving you something that you aren’t going to pay for. This can drive their sales and numbers into the ground.
WHAT YOUR MINIMUM CREDIT SCORE SHOULD BE TO BUY A CAR
One site, BadCredit.org, which is dedicated to helping people with bad credit build it back up again, claimed that there isn’t necessarily a magic number to a credit score that is good enough to get financing for a car.
“A bad credit score is usually not prohibitive in getting a car financed,” said the article’s author Ashley Dull, “but lower APRs will only be available for people with better credit.”
According to Dull, most dealerships will be able to get you good financing options if your credit score is around the 620s. Considering that the average credit, according to Credit.com, is 673, you can take comfort in knowing that your credit score doesn’t have to be super high to get financing for that car that you really want.
TIPS TO IMPROVE YOUR CREDIT SCORE
While the average credit score is in the 600s, it isn’t uncommon for people to have a score between 300 and 850. About only 18 percent of Americans have “good credit,” which is considered to be between 700 and 749.
If you have a low score, you can improve your credit score by paying your bills on time. If you have an issue with a payment schedule, reach out to the company and ask if it can be adjusted. You can also keep credit card balances as low as possible, and pay off debt when it comes instead of moving it around by using credit cards for your payments.