An In-Depth Look at What Determines Credit and How It Affects the Car-Buying Process
A credit score is a number that determines your history of borrowing money and tells lenders whether or not you are a financial risk to them. Lenders typically include credit card companies, mortgage bankers and automobile dealerships who will all check your credit score before deciding how much money they are willing to lend you. The higher your credit score – meaning that you’re a responsible loaner and pay back the money you’ve borrowed in a timely manner – the more likely you are to receive a loan from a lender. The lower your score, the less likely you are to receive a loan.
If your credit score is low and you wish to borrow money, lenders might grant you that loan but increase your interest rates whereas to encourage you to re-pay that loan in a timely manner before paying overly-excess amounts of interest. All in all, your credit score is a very important number and when looking to buy a new car will determine how much money you’re able to receive – if any at all – when applying for an auto loan.