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What Determines Your Credit Score? - Tom Naquin
What Determines Your Credit Score

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Elkhart, IN 46514
Phone: (574) 584-3328
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Your credit score is just a number that reflects your credit history, which is made up of five major factors. Credit scores can range from 300 to 850, and a credit score above 700 is considered good. Having good credit is the easiest way to qualify for a loan, so keep these factors in mind if you’re looking to buy or lease a new vehicle.

In case you didn’t already know, 65% of your credit history is determined by payment history and amounts owed. Whether or not you make your monthly payments on time is the number one factor that lenders look at, followed by how much debt you already have in installment loans, mortgages, and credit card payments. Lenders want to know whether they can rely on you to make your payments on time.

Next up, 15% of your score is determined by the length of your credit history. If you’ve been building credit for a long time, lenders have more to look at, so they have a better idea of whether they can trust you. Young people have a disadvantage here, but lots of dealerships have first-time buyer, as well as low/no-credit programs, so make sure to ask about them.

The last 20% is decided by recent credit inquiries and the types of credit you have. While opening up several accounts at once lowers your score, having a variety of types of credit like a mortgage, installment loans, and credit cards can help raise your score.

If you have a good score, your monthly payments and APR will be lower, you can qualify for a longer loan term, and you’ll have more options to choose from. So work on getting it as high as you can before you go car shopping!

When you are ready for your next new vehicle, be sure to visit Tom Naquin Chevrolet Cadillac Nissan!
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