How Your Credit Score Affects Auto Financing

Something anyone looking for an auto loan should consider is their credit score. This measurement of your qualification for certain loans is important for getting a great deal. That’s why Andy Mohr Auto Group has compiled this guide for drivers in the Indianapolis and Bloomington areas.

Read more to learn all about credit scores, how they work, and how they affect applying for an auto loan.

What Are Credit Scores?

If you have any amount of credit or debt history, you likely have a credit score associated with you. This is a measurement of your credit history displayed as a number ranging between 350 to 850. In short, your credit score works as a display of how likely you are to pay loans on time and consistently.

There are a number of other factors that affect your credit score as well, including factors such as having a large amount of debt. If you have accrued a significant amount of debt, applying for more debt will reduce your credit score.

Credit Scores and Auto Loans

When it comes to how credit scores can affect buying a car, there are a number of aspects of your auto loan that can be affected. Probably the most up-front example of what is affected is your loan’s APR.

APR is a measurement of how much interest your loan accrues over the course of a year. It’s important to keep this number down because the higher your APR, the more you pay on your vehicle in the long run. Credit scores directly affect your APR, meaning the lower your credit score, the higher your APR and vice versa.

Options for Drivers with Less-Than-Ideal Credit Scores

If you have a less-than-ideal credit score, there are still many ways for you to get a hold of an auto loan. There are many lenders who work to get those with less-than-ideal credit a loan.

Another great option for taking out a loan is to go to a bank or credit union that you are currently working with. The bank you do your primary banking with will have a detailed record of your account and your line of credit, meaning you already have a strong relationship with them.

Come Speak with Our Finance Team

If you want to take home a new car, we can help you create an auto loan with our finance team. Andy Mohr Auto Group is dedicated to helping Indianapolis and Bloomington drivers get the car they want, whether they have excellent or less-than-perfect credit.

Are you interested in applying for an auto loan through us? Explore our website and fill out a pre-approval form today!

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