Check Credit Report and Score Before an Auto Purchase

We already know that buying a car is an expensive endeavor, but it can be even more expensive if you don’t check your credit report before visiting a dealership. Many prospective auto buyers have no idea about how directly correlated their credit score is to their ability to get the best car loan possible. If you are one of these people, then you will benefit greatly from learning why you should check your credit report before buying a car.

What is a Credit Report?

If you have no idea what your credit report is, let’s take a closer look at it. The credit report is information rounded up that details your personal habits in relation to any credit you’ve been extended. So for instance, if you have a credit card and have taken out a loan for a mortgage, those items will be reported to one or more of three credit bureaus: Experian, TransUnion, and Equifax. These agencies in turn keep an updated report of whether you pay your bills on time, have fallen behind, or have defaulted on your accounts.

How well you maintain the bills associated with your credit is calculated into a credit score, which helps companies determine whether they want to extend you new credit – and at what interest rate. This includes auto dealerships.

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How Your Report Affects Your Auto Loan

As touched on previously, the information included on your credit report can have a positive or negative impact on you receiving an auto loan. The more negative information that can be found on the report, the more likely the dealer will view you as an “at-risk” borrower. And while this may not hurt your chances of securing a loan, it will most definitely ensure a high interest rate.

How to Check Your Credit Report

If you want to check your credit report before buying a car, there are several websites that will give you a free download of your full report with all three bureaus. However, most all charge to see your score. By checking your free reports, you can make repairs and also report discrepancies. You can check your score with our partner, Go Free Credit. It’s secure, fast and absolutely free!

If you’re concerned that you have negative information on your report that might result in a higher interest rate when buying a car, then it’s good to first check your credit report to see if you can make some repairs even before entering a dealership.

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About the Author

Stacey Bumpus

Stacey Bumpus holds both her Bachelor and Masters degrees in Communications. After spending years in corporate communications, she discovered freelancing was really her cup of tea and fell in love with finding and writing about the latest financial news. Now, providing news and tips about banking, mortgages, taxes (and even logging her own efforts to save for retirement), she's not only fulfilling her lifelong passion, but also helping others manage their finances responsibly.

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