Your credit score can be impacted in many ways. One of these ways is when you get a car loan. We are a trusted dealership that not only provides reliable used vehicles but also used car financing. We want to go over exactly how car loans affect credit scores but can also work together. Auto loans can positively impact and improve your credit score, but you need to make sure you are making your payments on time.
How Car Loans Influence Credit
Once you get a car loan, there are two things that can happen. One of the things is that checking your credit score can actually make it go down a few points. Getting an auto loan is no exception. But there is no need to worry, any time you check your credit, whether it be for a mortgage, student loan, or personal loan, it consequently goes down in score. So just make sure you are not checking it too often or applying for loans too much.
The other thing that can happen is in regards to your credit history. Having credit history is a great thing to have, especially for things like loans. This is how lenders see that you are trustworthy and responsible for paying back your debts. Reassuring them that you are a good candidate to lend money to- since they will be able to see you are going to pay them back.
How Auto Loans Look on Your Credit Report
It can feel overwhelming to see your credit report for the first time. After all, there is a lot of data in this report. If you want to simplify this process, here are two main categories you can look for that are going to appear on every credit report:
-Type of Accounts: check for your auto loan listed under “installment account”. You can see how you have borrowed a lump sum from a lender (such as a car loan).
-Current Status: this category is going to educate you on where you stand with your loan (how much you have paid off and how much you are still owing). Paying off your loans on time is going to help you achieve a high credit score.
Read More: https://goodfellowsauto.medium.com/car-loans-how-do-they-affect-my-credit-bd2b4bef2f55
How We Can Help
If you need a Bad Credit Auto Loan in Toronto, our dealership is here to help! Contact us today! Go to our website to learn more about our auto financing and all our available used vehicles!