What is my credit score? It sounds like a pretty simple question, doesn’t it? Most people are only vaguely aware of what their credit score is. The consumer may know she has good credit or maybe not-so-good credit, but few know the actual score. Unscrupulous car dealers can use this lack of knowledge to their benefit. If a potential buyer comes into a dealership and expresses interest in buying a car at some point the buyer’s credit score may be checked. The finance department may say that due to the buyer’s poor credit score the loan can only be made at a higher than typical interest rate.
From the perspective of the buyer higher interest rates on the same loan amount mean that the loan payments will be higher or that the term of the loan will be longer. Higher interest rates cost consumers hard-earned money. Higher interest rates can mean that the dealership and the finance company make more money on the deal. Some dealers may engage in fraud to get you to agree to higher than necessary interest rates.
You may have had some late payments due to personal situations like ill health, divorce, or being laid off. Late payment histories may negatively affect credit scores. On the other hand, the dealer may be misleading you to generate higher payments and extra profit. Information is power, check with the three primary credit-reporting agencies before shopping for a car or any large purchase that will be made on credit. If you know what your score is you will be less likely to be misled by incorrect information from a salesman. The three primary credit reporting agencies are Experian, Equifax, and TransUnion. You may be asked to pay a small fee to get your credit scores.