When it comes time to finance a new vehicle, a dealership is going to look up your credit score. This three digit number can make or break a car loan, and it’s all based on how well you’ve managed your finances in the past.
There are lots of different credit scores out there, but a widely-used one is FICO. FICO developed an algorithm that computes a number of factors in your financial life to provide lenders an easy and consistent number to show how likely you are to repay the loan.
Credit scores derive from factors like how much debt you have, payment history and how many late payments you’ve had, and the type of accounts you have. If you have good credit, a lender is more likely to lend to you with good interest rates.
If you have bad credit, you’ll need to improve it before you’ll be able to acquire credit for a new car. Ways to improve credit are fairly straightforward but take a little time to rebuild your score. The best thing to do is pay your bills on time. Late payments are a huge factor in credit scores. Another good practice is to pay off debts, especially credit cards, and then keep credit card balances low. And don’t apply for new credit very often, as the frequent inquiries can lower your score.
The experts at El Cajon Mitsubishi are well-versed in financial options and are flexible to find you the right deal.