Whether you're buying used cars or new, your FICO credit score impacts your final cost. Whether you've got your eye on the latest convertibles or are buying used cars, your credit score determines whether or not you'll receive a loan, and the interest rate you'll pay.
Not familiar with credit scores? They're three-digit numbers compiled by credit reporting agencies (CRA). The most commonly used is the FICO credit score and ranges from 300 to 850. The median score in America right now is 723.
The higher your FICO credit score, the lower your interest rate when you purchase a new vehicle. Two consumers purchase the same new-model car for $18,000 from a car dealer. Both buyers apply for a 36-month loan.
• Buyer A's 710 credit score nets him a 7.328% APR loan o Monthly payment: $558 o Total interest payments: $2,106
• Buyer B's score of 510 locks him into a 13.378% interest rate o Monthly payment: $610 o Total interest payments: $3,952
Obviously, the credit score made a difference: Buyer B pays $1,846 more than Buyer A for the same car.
A lower credit score means a higher final price tag when buying used cars.
Another two consumers are buying used cars from a car dealer. Car cost: $42,000. Loan term: 48 months.
• Buyer A's 722 credit score ensures a 7.063% APR o Monthly payment: $1,007 o Total interest payments: $6,335
• Buyer B's 622 score means an interest rate of 14.904% o Monthly payment: $1,167 o Total interest payments: $14,009
A huge difference—$7674—same car, same car dealer!
Reap significant savings on major purchases by raising your FICO credit score.
Getting on the path to financial health does not have to be difficult. All it takes is bit of know-how and commitment. Here are some steps towards self-help credit repair:
1. Know your credit score. 2. Make sure to fix any errors that appear on your credit report. 3. If your score is low, make the commitment to improve it.
You can raise your FICO credit score with an effective self help credit repair program.
Raise your credit score by paying bills on-time, every time. Financing a new car purchase or buying used cars is another method of self help credit repair.
© 2006 RK Auto Group
Tom Kline is Controller of RK Auto Group (RK Buick, RK Chevrolet, RK Subaru, RK Scion and RK Toyota).
- Related Videos
- Related Articles
- Ask / Related Q&A
- How Does Your FICO Credit Score Impact You When you a Buy a Vehicle?
- Improve Your FICO Credit Score by Making Sure it's Error-Free: a Guide for Military Men & Women
- The Fico Credit Score – What is It?
- A Guide to Buying Used Cars
- Did You Know We All Have a New Secret Credit Score?
- Credit Score questions and answers
- Credit Scores - Why Are They So Important?
- Your Credit Score – What it means and how to increase it
Advantages of 2 Cycle Synthetic Oil
By: Vince Peter Platania | 11/11/2009Explains how lubrication is handled differently in 2 cycle engines and the special conditions under which 2 cycle oils must operate. Points out the benefits of 2 cycle synthetic oil over conventional lubricants for these special applications…
Advantages of Synthetic Automatic Transmission Fluid
By: Vince Peter Platania | 11/11/2009Explains the specialized functions of automatic transmission fluid, in particular how it functions as both lubricant and as a hydraulic fluid. Looks at challenges automatic transmission fluid has to overcome in operation, and explains how synthetic automatic transmission fluid is better able to meet those challenges…
Finding Legitimate Ways To Improve My Gas Mileage
By: Vince Peter Platania | 11/11/2009In today's uncertain economy, everyone is looking for ways to save even the smallest amount of money. With the world facing the highest fluctuation of gas prices in history and the popularity of the larger, utility vehicles being a constant trend, one good way to save money is at the gas pump. This means that almost everyone is looking for legitimate answers to the question, “how can I improve my gas mileage?” One legitimate way to improve fuel economy is to switch from traditional, petroleum
The Protection Of Synthetic Gear Oil
By: Vince Peter Platania | 11/11/2009Most consumers understand enough about their vehicle to change their oil or automatic transmission fluid at the regularly suggested intervals. Some have even considered the benefits of using a synthetic product for it's better protection or increased performance of their engine. They forget, though, other components, such as gearboxes and differentials, which need fluid servicing as well. These can also be significantly better protected with a synthetic gear oil.
Nissan Cube, the Cooler Scion xB
By: Kasan Groupe | 11/11/2009The Nissan Cube is a new, cool car that made its way to the US in May of 2009. Since then it has been named one of the coolest cars of the year that is priced under $18,000. This luxurious, spacious vehicle is similar to the Scion xB but cooler in a lot of ways. After all, it was designed with inspiration from a bulldog with sunglasses, how cooler can it get. The awesomely unique wraparound window in the back is just one Cube feature that makes it cooler than the rest.
Philippe Etancelin - Privateer
By: Brenda Williams | 11/11/2009Philippe Etancelin's racing career was unique in several ways. It spanned four decades from 1926 until 1952. When he placed fifth in the Italian Grand Prix in 1950 he became, at age 53, the oldest driver who scored championship points. And, at the inception of the F-1 Championship in 1950,...
Chris Amon - Unluckiest Driver?
By: Brenda Williams | 11/11/2009Successful motor racing depends upon the combination of a highly skilled driver fitted into a top performance vehicle both of which require the blessing of Lady Luck. Sometimes superlative driving skill can compensate for mechanical deficiencies but only sometimes. And nothing compensates for lack of luck. For instance, at Monaco...
One of popular vehicles - Mercedes Benz
By: Rei Yonekura | 11/11/2009Mercedes Benz offers an exclusive variety of ultra luxury vehicles like sedans, limousines, trucks, buses and coaches to their customers. They have a tremendously outstanding reputation for developing unique luxury, high performance vehicles. They are extremely well known for their high quality manufacturing techniques, innovative safety features and luxury offerings. They have earned the status of owning a crown for the development of the latest luxury vehicle innovations on automotive indus
How Does Your FICO Credit Score Impact You When you a Buy a Vehicle?
By: Tom Kline | 25/06/2006 | AutomotiveA good FICO credit score is critical for securing car loans at favorable interest rates. Learn the ins and outs of credit scores and methods of self help credit repair.
Improve Your FICO Credit Score by Making Sure it's Error-Free: a Guide for Military Men & Women
By: Tom Kline | 21/06/2006 | AutomotiveWhen buying used cars, a strong FICO credit score helps military borrowers. Don't let mistakes in your credit report lower your score: Learn how to fix errors & get lower interest rates.
Self Help Credit Repair: 8 Tips to Get You Back on Track
By: Tom Kline | 16/06/2006 | AutomotiveHave a low FICO credit score? Learn how to rebuild your credit and secure an auto loan when you thought you couldn't. A Virginia car dealer suggests 8 tips to improve your credit and improve your financial health.
Business Consultants: How to Tell When your Business Needs a Consultant.
By: Tom Kline | 11/05/2006 | ManagementIn any small to medium-size business, there comes a time when you don't know exactly what to do or how to do it. Does your company need a consultant to grow or survive? Tom Kline of RK Auto Group (RK Toyota, RK Buick, RK Chevrolet, RK Subaru & RK Scion) lists 9 situations where a consultant can make a positive difference and lists the top five advantages of hiring a consultant.
Ensure a Pleasant Summer Road Trip by Showing your Vehicle a Little TLC.
By: Tom Kline | 20/04/2006 | AutomotiveEnsure a pleasant summer road trip by showing your vehicle a little TLC. Part 1 of the RK Auto Group check point list covers tires, brakes, belts and hoses.
Get Everything you Want with these Negotiating Tips from a Successful Business.
By: Tom Kline | 20/04/2006 | MotivationalDoesn't it seem sometimes as though life is a constant struggle to get what you want? End your struggles with 3 simple words: learn to negotiate.
Negotiating your Way to Happiness: Part 2
By: Tom Kline | 19/04/2006 | MotivationalWhether you're buying a new home or deciding on a vacation, chances are you'll get your way if you learn closing skills. Win in any situation with these closing tips.