Why Does Your Credit Score Matter When Purchasing a Car?
Are you thinking about purchasing a car soon? First, you should check your credit score, which you can do for free as an Educators member. Here are the reasons your score will affect your auto loan:
Interest Rates & Monthly Payments
Your credit score plays a large role in determining your loan’s interest rate1. A higher score means a lower interest rate. A lower score means a higher interest rate. The lower the interest rate, the lower your monthly payment will be and you will save money on interest. Want to see how a higher or lower interest rate could affect your monthly payment? Check out our free auto loan affordability calculator, powered by Banzai.
Approval Odds
A credit score shows a lender your credit worthiness. A higher credit score boosts your approvability and can give you more lending options. For example, someone with a good credit score is more likely to qualify for a higher loan amount, because of the good habits they have built. A good, strong credit score has on-time payments, low credit card balances, a mix of trade lines, etc.
Want to Improve Your Credit Score?
The good news is that your score can always be improved by making meaningful changes to your finances. To start, focus on making payments on time and reducing credit card balances. Next, depending on your situation, consider consolidating higher-interest debt with a Personal Loan or Home Equity Loan, which may help simplify your payments.
Educators Credit Union members looking to improve their score are encouraged to reach out to our staff for personalized options. As a credit union, our mission is to support our communities, and that starts with helping our members achieve their financial goals!
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1Rates and terms may vary based on age of collateral, loan to value, credit score and final loan amount.