Memorial Day weekend is the unofficial start to summer and one of the hottest times to test drive that new ride you’ve been eyeing. Prices are slashed – and the salesforce is primed to make their quota by cutting deals that’ll get you behind the wheel if your credit scores will go the distance.
Use these “Credit Road Rules” to help take the stress out of maneuvering auto financing:
CREDIT ROAD RULE #1: STOP – See where you stand because it can impact your decision on a make and model. Good credit scores are the key to negotiating the best interest rates that can lower your monthly payments. Check your scores from TransUnion®, Equifax® and Experian® before you hit the lots, and understand what is driving your scores so you will be better prepared to navigate auto financing discussions.
CREDIT ROAD RULE #2: DANGER AHEAD – Score-lowering errors left unaddressed could impact your interest rate. Undetected errors on your credit reports can damage your scores and run your car-buying plans into a ditch. File a dispute to correct any errors or remove damaging outdated information before you start kicking tires.
CREDIT ROAD RULE #3: RED LIGHT – Put the brakes on opening any new credit cards.Each new inquiry into your credit can lower your scores. Plus, racking up more charges will increase your debt, which won’t score you any points with lenders when you find your sweet new ride.
CREDIT ROAD RULE #4: GREEN LIGHT – Get preapproved to remove doubt about the rate you will be offered.Preapproval by your bank or credit union for a set loan amount and interest rate before you step onto the car lot means you don’t have to anxiously wait while dealers run your credit with multiple lenders. You’ll also be better prepared to negotiate a deal.