Check Your Credit Before You Shop for a New Car

June 10th, 2014 by

US_TM13_115_A_BWAre you ready to shop for a new car? Have you decided what type of vehicle to buy and set your budget? That’s a great start but there is one more thing you need to do before heading to the Toyota dealership. If you haven’t done so already, you need to check your credit score. Even if you think you have great credit, it’s still better to know your exact score before making a purchase as big as a car.

Getting your credit score is easy but you will need to acquire one from each of the three major credit report agencies. These are Experian, TransUnion and Equifax and you can get one free report per year from each of these agencies. Credit scores usually range between 300 to 850 and are separated into categories ranging from bad to excellent.

A score of:

  • 599 or under is bad
  • 600-649 is poor
  • 650-699 is fair
  • 700-749 is good
  • 750 or over is excellent

Keep in mind that this is just a guide and that different lenders set their own rules as to what they consider good, excellent, etc.

Why Should You Check Your Credit Before You Shop for a New Car?

Your credit score plays a major role in the type of loan you receive and it will determine if a bank approves you for credit or not. If you have a bad score, you’ll be considered high risk and your interest rates will be much higher when you buy a new Toyota than it would be if you have a good score. It may even be difficult to get a loan at all if it’s too bad, so you need to know what to expect.

Even if you have been doing everything right to maintain a great credit score, there is always a chance that something has been reported on your credit incorrectly. In this case, you’ll need to dispute the inaccurate information to get it off your record and it normally takes at least two or three months to correct mistakes.

Being the victim of identity theft is always a possibility, too. If something like this has happened, it could take a long time to get things straightened out. This is why you should check your credit score when you first begin thinking about buying a new car. In fact, checking a few months in advance is recommended so you’ll have time to fix any problems you find, before you’re sitting in front of a Toyota dealer waiting to hear back from the lender.

What Determines Your Credit Score?

Your credit score is based on whether or not you pay your bills every month on time but that is only one part of it. Late payments on utility bills, house payments and so forth will lower your score in the same way that having outstanding debts will. Therefore, if you’ve been late on a few payments your score may be lower than you think.

The type of credit you have also matters. For example, do you have credit cards that you’re paying on every month? If you do and they’re close to being maxed out, pay these down before you go shopping for a new Toyota because that can lower your score, too. How much credit you have at any given time, the length of time that you have had credit and no credit at all will affect your score in some way.

When you check your credit before you shop for a new car, you’ll have time to make corrections or build up your score so you can receive a better deal on your new Toyota. At the very least, you’ll know what to expect from the lenders.

No matter what your credit score is South Dade Toyota can help you get approved to purchase the car of your dreams.

 

Posted in Car Buying