If you’re planning to buy a car, your credit score can make a huge difference in how much you pay for it. A higher score can help you secure a lower interest rate and better loan terms, potentially saving you hundreds or even thousands of dollars over the life of your auto loan.

Check Your Credit Report for Errors

Start by requesting a free credit report from the three major credit bureaus — Equifax, Experian, and TransUnion. Look for mistakes like incorrect account balances, late payments you didn’t make, or accounts that aren’t yours. Dispute any errors promptly; correcting them can give your score an immediate boost.

Pay Bills on Time, Every Time

Your payment history makes up about 35% of your credit score. Set up reminders or automatic payments to avoid missing due dates. Even one late payment can lower your score, so consistency is key.

Reduce Your Credit Card Balances

Your credit utilization ratio — the amount of credit you’re using compared to your limit — should ideally be under 30%. Pay down high balances starting with the cards that have the highest interest rates. Avoid making new large purchases before applying for a loan.

Conclusion

A better credit score means more negotiating power, lower interest rates, and better loan terms when financing your car. By taking small but consistent steps now — like paying bills on time, lowering balances, and avoiding new credit — you can position yourself for a smarter, more affordable auto loan.