You’ve finally had it with your old vehicle. You’ve spent months searching, searching for the best deals and figuring out what kind of car you’d like to own, and you’ve finally found the new car you’d like to call your own. The only problem now is getting the necessary funds to make the purchase. You are most likely looking for a lender. Shopping for auto loans can be a frustrating and confusing process. Obviously, you would like to get the lowest interest rate possible, and there are many different companies trying to get your business, all with different plans. So the question is: what is the best plan I can get and how high should I settle?

One of the most important factors to understand when applying for auto loans is your credit score. Every time you apply for any type of credit, that business will consult with a credit bureau. You will be ranked with a number between 300 and 850, where 300 represents the highest risk and 850 represents the lowest risk. The vast majority of people score between 600 and 800, and factors that can affect your credit rating include the number of credit channels, the number of recent inquiries, timely bill payments, and any negative reports or bill submitted.

It’s good to note that if you’re looking for car loans, student loans, or home mortgages, any inquiry made in the last 30 days will count as an inquiry. Compare this to the inquiries made by the credit card companies, which will appear on your statement. The point is that shopping around for auto loans won’t negatively affect your eligibility, so you better keep looking for the best possible deal.

When it comes to what interest rate you will be able to get, your score will be scrutinized. In general, someone with a score above 680 will be eligible for low interest, while those with a score above 700 will receive the best deals. As long as your score is above 600, you are most likely not considered high risk and can probably get a decent deal.

Once you understand how your score relates to your ability to get a loan, how do you know what your range is? You may be surprised to learn that different agencies will give you a slightly different rating. This mainly depends on the type of credit or loan you are looking to obtain, so keep this in mind when you shop. To get a general idea of ​​how you’re doing, you can file a personal inquiry and find out your own credit score.

All in all, searching for auto loans shouldn’t be a very stressful process. Armed with the knowledge of how lenders rate you, you should be able to navigate the system and be on your way to getting the ride you deserve.