If you're thinking of buying a new car, it's best to know your FICO Score before you start comparison shopping.
There will be three factors that determine how much your monthly auto payments will be; how much you borrow, the interest rate you are offered, and the term of your loan. The amount you borrow is up to you and the car choice you make. The interest rate is also within your control as long as you are prepared. Most auto lenders will look at your FICO Scores to determine the rate they will offer you. The term of your auto loan is usually between 36 and 60 months. A salesperson may stretch out the term length to lower the monthly payment – of course, by doing this they are increasing the amount you will pay over the entire term of the loan.
While you can negotiate the amount and term length of your loan, you cannot negotiate your FICO Score at the dealership. Your FICO Score is a representation of your risk to the auto lender. So, a good FICO Score means you're less risky of a borrower and can be offered a lower interest rate. A bad score may mean you won't qualify for the auto loan, or if you do, you will likely be offered a higher interest rate. myFICO recommends that you call your prospective auto lender and ask what your FICO Score needs to be to qualify for the loan you want. You can then check your FICO Score to make sure you will qualify for that loan.
To see how much your FICO Score can save you over the life of the loan, check out our auto loan chart.
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myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.