Why You Should Check Your Credit Before Car Shopping – Tips from Mint Hill Toyota

Jul 28, 2012

Before you sit down with your Mint Hills North Carolina Toyota dealer, there’s a few things you should do to get your financial house in order. Buying a new car is an investment, not just a purchase. And to get the most out of your purchase you should know about your credit score.

Your credit score is going to determine how high your interest rate is going to be on the car loan. Your credit score is determined by your credit history. Sitting down with a representative of your bank or credit union can teach you a lot about your credit history.

For instance, most banks and credit unions will recommend you look at your credit history report at least once a year, and nearly half a year before you plan to make a huge purchase, such as a car. This will give you enough time to fix any discrepancies.

Certain actions impact your credit score such as closing credit card accounts, applying for new credit, or making payments late. Opening a new card may show that you need more credit to make payments, and will negatively affect your credit score. Closing a credit card, especially an older one, will make your overall credit history shorter, and lowers your score.

The last thing you need to wonder about is your credit to debt ratio. This ratio will go a long way to determine the interest on your loan or even whether or not you qualify for a car loan in the first place. Keeping the amount of money you owe low in comparison to the amount of credit available to you shows you have a good handle of your debt to credit ratio and will help you get approved for a car loan.

If you are thinking about buying a new Toyota, take some time to look at and improve your credit score for the best car loan rates.