Buying a new or used car should be an exciting time, filled with many big decisions such as deciding on the perfect color, make, and model that’s suitable to your taste and needs.
However, when it comes time to sign the dotted line and getting handing the keys, having a good credit score is important.
At Platte City-Airport Chrysler Dodge Jeep Ram, we pride ourselves in providing an easy, transparent car buying process, from the test drive to the finance department. We’ll do everything we can to find you the best auto loan possible.
In the meantime, you can take steps now to get the best deal by avoiding certain things. The factors below can hurt your credit and make it more difficult for you to secure an auto loan without a high interest rate:
1. Paying late or not at all
When you skip payments or are consistently late, this can greatly affect your credit score. If necessary, keep a good calendar to know exactly when payments are due, or set up autopay to ensure payments are made consistently and timely.
2. Having your account “charged off”
Being charged off is one of the worst things that can impact your credit score. This is when a credit card company puts a hold on your account because they think you aren’t going to make payments. This is a huge red flag for potential auto lenders.
3. Filing bankruptcy
If you’ve filed for bankruptcy in the last few years, getting approved for a low interest car loan may be next to impossible. Be sure you’ve researched all other options before filing for bankruptcy as this can devastate your credit score for many years.
4. Foreclosed home
Getting behind on mortgage payments and having your home foreclosed can be a real problem in getting any type of loan, including a car loan.
5. Closing credit cards
Closing an old credit card — one with a balance or not — can actually damage your credit. If closing a line of credit is the best way to avoid getting into debt or the car has an annual fee, then perhaps it’s still the right move financially. Just be sure to think twice before canceling the account. Perhaps you can keep the card but store it in a drawer just in case you need it at some future date.
6. Too many inquiries
Getting quotes for too many loans or signing up for too many credit cards can lead to a drop in your credit score. Research thoroughly before making the call to be certain this is what you really want and need.
7. Errors in credit report
Sometimes credit reports are inaccurate. Make sure there aren’t errors in your report before the car company pulls it.
There are many other things that can affect your overall credit score and impact the car loan rate you’re offered at the dealership. If you’re in the market for a new car, make sure you always pay your bills on time, avoid bankruptcy, and follow these good credit building tips.
Applying for a car loan is easy with Platte City-Airport Chrysler, and you can get started financing or leasing your next vehicle right away. Get started by using our car payment calculator to estimate your monthly auto payment.
Continue reading to learn more about your car financing options.