Why You Should Check Your Credit Report Before You Finance a Car
In Bills & Budgeting
Posted October 9, 2012 by Kalen Smith
Many people choose to finance their car through a dealer rather than a bank or other financial institution. I can understand the rationale with financing through a dealer. It is more convenient and offers you the opportunity to take advantage of a larger network of lenders.
On the other hand, many people end up looking for loans themselves. You might be able to save more money by shopping for a loan on your own.
Whatever approach you take, you will need to make sure that you have done your research ahead of time. Many people end up paying more than they need to for their loan. You will want to make sure that you don?t take out a higher interest rate than you need when buying a car. One of the biggest reasons many consumers are stuck with a higher interest rate is that they don?t bother to check their credit score before they make the purchase.
Why You Should Check Your Credit Score
You should always know your credit score before you buy a car. You may qualify for a great deal, but be passed up because you didn?t know about all the deals you could find.
You can negotiate with the dealer and pressure them to lower your rates if you have a good credit score. Dealers put a lot of work into helping you secure a loan and tend to charge a premium for it. However, they would rather you secure financing through them rather than going outside.
You can make an argument that you deserve a lower rate if you have a good credit score. Don?t neglect to mention this! Lenders may offer you a much higher rate until you bring this up.
Additionally, you can often use outside financers to your advantage when seeking financing with the dealer. You can mention that you have been offered a better deal with an outside financer. Many car buyers have stated that the dealer offered them a rate about a percentage point higher than their outside financer. Their loan dropped a couple percent the moment they brought up the fact that they had a better rate with another lender.
You should always know your credit score before you buy a vehicle. You will probably be able to secure a much better interest rate after you?ve done your homework.
Andrew is a personal finance and lifestyle columnist for Tindol Ford.
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Source: http://www.moneyfile.net/budgeting/why-you-should-check-your-credit-report-before-you-finance-a-car/
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