After a home, a car is typically the second most expensive purchase people will make. The credit tracking company Experian estimates that 80% of new cars and 38% of used cars are purchased with the help of a loan.
There three major credit tracking companies, Equifax, Experian and TransUnion, and you can use any of them by going to AnnualCreditReport.com. These credit reports are free, so beware of anyone who charges a fee to do this. A credit report is also a good way to check if there's been any fraudulent activity on your accounts.
Car buying is all about negotiation, and the loan is no different. You might be able to get better terms by letting the lender know you're shopping around for a loan. 4. Get pre-approval Once you've selected a handful of lenders, it's time to get pre-approved for your loan. This is different than prequalifying, in which lenders give you a rough estimate of what your loan terms will be. Prequalifying requires what the financing industry calls a"soft pull" of your credit score, which isn't as detailed as a pre-approval's"hard pull.