Your credit history plays an outsized role in the car-buying process, especially when it comes to financing. Understanding your credit profile before stepping onto a dealership’s lot can save you money — and unnecessary stress.

You can work to boost your credit score

Checking your credit history before you start car shopping allows you to make improvements that could benefit you. Reviewing your credit report and disputing any errors may help raise your credit score.

You’ll also be able to identify and correct your bad habits. Starting to make on-time payments or paying down high credit card balances can further increase your score. It’ll take time, but you'll be better off delaying your purchase until you see the results from your efforts.

You can try to improve your finance terms

Once you’ve made the necessary adjustments to your credit report (or overall financial behavior), you should start to realize:

• Lower interest rates: Borrowers with positive credit often qualify for lower rates, which decreases the cost of financing a vehicle over time

• Higher approval chances: A good credit score can make financing approval more likely

• Smaller down payment requests: A solid credit profile may reduce the amount you need to pay upfront

You can strengthen your bargaining power

Finally, an in-depth knowledge of your credit history provides an edge because it allows you to:

• Negotiate with confidence: Armed with your credit information, you can approach negotiations with dealerships or lenders from a stronger position. This knowledge will prevent you from accepting a rate worse than you deserve.

• Anticipate interest rates: When you know your credit standing, you can also estimate the rates you’ll likely qualify for and plan accordingly. This knowledge will allow you to increase your budget accordingly, as less money will need to go towards interest payments.

You can prevent financing surprises

Even if you can’t take the necessary steps to benefit your credit score before needing to pursue auto financing, there are upsides to being informed. Having an awareness of the negative items on your credit report before submitting your application can help you prepare. Providing context to lenders can be beneficial if there are legitimate reasons for past credit issues (like a job loss or medical expenses).

Insight into your credit profile can additionally help you set realistic expectations for the type of vehicle and financing you’re likely to qualify for, reducing the risk of disappointment or frustration at the 11th hour.

You can use your info to your advantage

Understanding your credit history before buying a vehicle can improve your chances of securing favorable terms. Start by reviewing your credit report and addressing any issues. This legwork will help you approach the car-buying process with confidence, clarity, or both.

When you’re ready for auto financing, Credit Acceptance works with over 15,000 dealerships nationwide and lets you get pre-qualified online.