What Role Does My Credit Play in Purchasing a Car?

Lenders will take multiple things into account when determining what financing you qualify for, and one of the most important factors is your credit score. The better your credit is, the more likely you are to qualify for a lower interest rate.

Dealerships can get a lot of details they need when they pull your credit information. Your credit score can simultaneously give lenders a good idea of your financial history and your financial responsibility. In the lender’s eyes, a high credit score means there is less risk that you will default on your loan. If you have a low credit score, therefore, it is likely that you’ll have to pay a higher down payment and interest rate.

Looking for the best rate with your score

One good way to ensure that your credit will provide you with optimal financing rates is to do some research before you show up at the dealership. Call a few dealerships and ask what types of financing they have available, and see what the likelihood is that your score would be approved. This will give you a good idea of what you’ll be able to afford once you actually go to the dealership.


Many dealerships often have special deals for customers with low credit scores, so watch out for these promotions. If you take advantage of these specials, you can get a good deal and use these car payments to improve your credit over time.

Tips to improve or maintain your credit score

Additionally, try to implement these tips—they are good things to keep in mind for your credit in general, but they are particularly important if you are planning on taking out an auto loan in the near future:

         Pay your bills on time

         Avoid accumulating new debt

         Periodically check in on your credit report so you always have a general, if not exact, idea of where you’re at, credit-wise.


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