| Whether you're buying used cars or new, your FICO | | | | when buying used cars. |
| credit score impacts your final cost. Whether you've | | | | Another two consumers are buying used cars from a |
| got your eye on the latest convertibles or are buying | | | | car dealer. Car cost: $42,000. Loan term: 48 months. |
| used cars, your credit score determines whether or | | | | • Buyer A's 722 credit score ensures a 7.063% |
| not you'll receive a loan, and the interest rate you'll | | | | APR o Monthly payment: $1,007 o Total interest |
| pay. | | | | payments: $6,335 |
| Not familiar with credit scores? They're three-digit | | | | • Buyer B's 622 score means an interest rate of |
| numbers compiled by credit reporting agencies (CRA). | | | | 14.904% o Monthly payment: $1,167 o Total interest |
| The most commonly used is the FICO credit score | | | | payments: $14,009 |
| and ranges from 300 to 850. The median score in | | | | A huge difference—$7674—same car, same |
| America right now is 723. | | | | car dealer! |
| The higher your FICO credit score, the lower your | | | | Reap significant savings on major purchases by raising |
| interest rate when you purchase a new vehicle. Two | | | | your FICO credit score. |
| consumers purchase the same new-model car for | | | | Getting on the path to financial health does not have |
| $18,000 from a car dealer. Both buyers apply for a | | | | to be difficult. All it takes is bit of know-how and |
| 36-month loan. | | | | commitment. Here are some steps towards self-help |
| • Buyer A's 710 credit score nets him a 7.328% | | | | credit repair: |
| APR loan o Monthly payment: $558 o Total interest | | | | 1. Know your credit score. 2. Make sure to fix any |
| payments: $2,106 | | | | errors that appear on your credit report. 3. If your |
| • Buyer B's score of 510 locks him into a 13.378% | | | | score is low, make the commitment to improve it. |
| interest rate o Monthly payment: $610 o Total | | | | You can raise your FICO credit score with an |
| interest payments: $3,952 | | | | effective self help credit repair program. |
| Obviously, the credit score made a difference: Buyer | | | | Raise your credit score by paying bills on-time, every |
| B pays $1,846 more than Buyer A for the same car. | | | | time. Financing a new car purchase or buying used |
| A lower credit score means a higher final price tag | | | | cars is another method of self help credit repair. |