When buying a used car, there are so many things to consider that can make the process a little daunting. What year and model are you looking for? What price range can you afford? What should you be looking out for when examining the car? What does your credit score look like? That last one might not seem typical for this list of questions, but it should.
Before you start browsing used cars for sale, it really is worthwhile to check on your credit.
1. Potential Errors
One good reason to check your credit report before buying a used car is that it will let you spot any potential errors or suspicious activity.
In an FTC study, it was revealed that roughly 5% of people had an error on their credit reports. This is an alarming number, and it reinforces the idea that you should check your credit regularly. After all, mistakes like this can have a significant impact on your credit score and affect your options when you shop for your used car. Thankfully, with Credit Sesame, you can check your credit score for free and start taking any steps needed to clean your record. It typically isn’t difficult to dispute errors, and you can have them taken care of in as little as 30 days.
2. Get Your Foot in the Door
Once you’re satisfied with your credit report and you have an idea of the car you want to buy, it’s important to remember that you probably aren’t the only interested buyer.
There are a number of factors that dealers will look into when selling, including how much financing a buyer will need or how big of a down payment they can make. However, one thing that will make you an attractive buyer is a good credit score. Particularly if it is above 700, you can have a leg up on your competition and possibly be offered a better deal.
3. Get a Better Loan
Naturally, loans are going to be one of the first things to come to mind when thinking about your credit score. Nearly 53% of used cars are purchased with loans, so the odds are you’ll be considering this. Having a good credit score won’t just help you land a better offer, it will make you more attractive to auto lenders.
Your credit score isn’t the only factor they’ll look into, of course. There will also be matters like your employment status, your down payment amount, and the age of the vehicle. But a credit score that shows your trustworthiness can be the biggest factor and it can not ensure you get a loan with a good interest rate.
While it is possible to get an auto loan with a low credit score, you will find it near impossible to get anything beyond a subpar rate. Having to pay that extra interest may put your car upgrade on hold indefinitely.
Takeaway
Even if you find your credit score isn’t to your liking, don’t despair. There are some immediate steps you can take towards repairing it. Paying off your credit cards bi-monthly is a simple step to start with. Beyond this, you’ll need to set a strict budget in order to stop accruing more debt and pay off what you owe. It can be a lengthy process that will require discipline, but it will get you to your used car, which in the end can improve your credit score even more if you pay your debt on time.