If you’re in the market for a car loan, it’s important you understand how your credit score is calculated. Here at GreatRateCarLoans.com, we have a proven record of providing car loans to people regardless of credit score.
Here are 4 Factors That Contribute to Your Credit Score:
Your Payment History
Creditors want to know if you will be able to pay them back. If you have a history of missing payments, this will negatively impact your credit score in a significant way.
How Much You Owe
If a creditor sees you have a lot of debt and are applying for additional credit, they will take this into account. Additionally, if you have a lot of debt in relation to the amount of available credit, your credit score may fall into a lower category.
The Length of Your Credit History
If you don’t have a long credit history, it can be more challenging to obtain a loan.
New Credit Card Applications
The more credit you are applying for can negatively impact your credit score. While applying for new credit at reasonable times can increase your score, applying too often can have the wrong effect.
Types of Credit
An excellent way to demonstrate your ability to manage your debts is to maintain a diverse range of credit types including credit cards, car loan, lines of credit and a mortgage. However, if you are struggling to manage this credit, this could lower your credit score.