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The Affect Your Income Has On Your Auto Loan Deal

Many people who apply for an auto loan may not know this but what you earn has an effect on what you end up being offered in terms of interest rate. However there are certain factors which need to be taken into consideration apart from how much you are earning which also includes your money management which has an effect on your overall annual credit score.

Your credit score is something that every lender will check prior to furnishing you with a quote. If you have good income but you owe more than you can afford to pay back many auto loan companies are going to see you as a credit risk and not offer you those super low interest rates.

The first step before you go ahead and apply for an auto loan is to take the time out and request a copy of your credit report from all three credit reporting companies i.e. Experian, Equifax and TransUnion. The reason why this is important is because all three companies are checked by lenders and there may be times when one company may have an updated record of your closed or new accounts which the other might not. This is something which needs to be fixed as it has a direct effect on your credit score.

Once you know exactly where you stand in terms of credit you will know exactly what to expect in terms of interest rate. If your credit is over 700 points you can expect to get those advertised interest rates while if it’s between 500 and 600 points then you can expect something higher, while anything lower than 500 means that you will have to struggle just to find a lender to sanction an auto loan for you, something which can definitely cause lots of frustration.

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