Perhaps the most important step in the car buying process is
the loan itself. Your credit rating and the monthly payment you can afford is
has a direct impact on what car and options you can purchase. What you’re
buying also has an effect on the terms of the loan. The price of the car, your
trade-in value, down payment and whether it’s new or used will also have an
impact on the interest rate and the length of the loan.
Before undertaking a major purchase such as a house or car
it’s a good idea to take a look at the credit reports and scores from all three
agencies. You’ll want to be sure there are no errors, and if you’ve had some
difficulties in the past you’ll want to be prepared to explain the circumstances
that lead to them. Under federal law, you’re entitled to a free copy of your
credit report from each agency once a year. However, credit scores don’t fall
under that requirement. But the cost of obtaining your score from isn’t
expensive and worth doing so you know what to expect when shopping for a loan.