Does a credit score calculation affect your ability to buy a car in Glanbrook?

Does a credit score calculation affect your ability to buy a car in Glanbrook?

Posted on June 16, 2022

We talk a lot about credit scores and financing around here.  It’s one thing to know your score, but do you know how it’s been calculated and how your actions affect it?  What impact does it have on your car buying experience?

The biggest factor considered is your payment history.  Paying your bills on time every month is the most important thing you can do to keep your credit score on the positive side.  Any payments on loans, credit cards, lines of credit, and mortgages are all weighed in the determination.  This section also includes details on late or missed payments with details on how late they were and how much was owed each time.

Next consideration is how much credit you’ve used vs. what’s available to you.  This includes your credit limits, like the max on your credit card, and how far away from that limit you are.  You may make your minimum payments on time, but is it just to keep that credit card from maxing out?  That will be considered in your score.

The third section reported in your total score is your credit history.  How long have your accounts been open?  Creditors don’t mind seeing that you’ve held the same credit card for years: if you’ve been maintaining it the whole time, it shows them you can manage your credit accounts.

Public records also factor into the calculation.  Anyone who has filed for bankruptcy or has fallen into collections will be publicly recorded.  These individuals may experience a significant and long-lasting impact on their score as a result.

Last is any inquiries on your credit file.  Whenever you apply for a new loan in Glanbrook, or a credit card, it is logged as an “inquiry”.  It’s known as a “hard pull” on your file.  One of these in and of itself likely won’t have a negative impact on your score, but it will be considered with other factors.

When you apply to be pre-approved for a car loan, it’s called a “soft pull” and it won’t impact your score.  You also don’t need to worry that checking your own credit score will have a negative effect.

Overall, how your credit score is calculated won’t impact your ability to apply for a car loan.  It is important to understand what goes into that number, so you can be sure you’re making the right financial decisions.  When you start your car search, the pre-approval form is a great tool because you’ll already know that maximum a lender is willing to provide before you start shopping.

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