Before you start shopping for a car and applying for a car loan, it is highly advisable to check your credit rating. It's the first thing to do, but people tend to forget about it ... Too often, we start looking for a new vehicle, we shop around a bit, we fall in love with a specific model, we go to the dealership, then we sit down with the seller and it's at the time of financing that we have our credit report checked to find out if our request is approved ... or refused. If you are currently shopping for a new car, stop immediately and then check your credit report online first. This way, you will have a better idea of the type of car you can afford and you will not be disappointed to learn that you cannot afford the model of your dreams today. A loan at the best interest rate or at a high rate? After getting a copy of your credit report, you will have a better idea of the interest rate for which you will be able to qualify. Because the 3 digits displayed by your credit rating will give you a good clue about your next auto financing, whether you are likely to be approved for a regular car loan at the best rate or that of the "2nd or 3rd high credit chance ". So, be prepared by consulting your credit rating BEFORE you start shopping, since it will give you ammunition to better negotiate the financing of your loan and the seller will not be able to take advantage of you by offering you an abnormally high interest rate Student. Credit score Each of the two agencies will produce a report including your credit rating, a number that varies between 300 and 900 . The worst possible score is 300 and the best is 900. But in general, if your credit rating is above 700, you are considered a "good credit" for a car loan. Financial institutions will use this score to determine if the buyer is going to be a good payer or if he represents a risk of being in default. A person with a low credit score poses a risk to the bank, which is why they will have difficulty being approved for a regular car loan and will have to fall back on the second chance at high rate credit. . Conversely, people who have a good credit rating will have access to the best interest rates for their car loan. EXAMPLE: For 5 years, for a car of $ 25,000, the buyer with a "good credit" who qualifies for financing at 2% interest will pay $ 438.20 per month. The buyer with "bad credit car Dealership " who has obtained a loan at 18% interest will have to pay $ 634.84 per month. So, do you understand now why it is important to know your credit rating before going to the dealer? This is to find out if you should improve your financial situation before making the decision to buy or rent a car. But above all, to save money!
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