Credit score has been a common topic of conversation over recent years. However, many do not understand exactly how credit can impact their life. The better your credit, the more likely you’re able to finance at a lower rate. Your credit score affects everything from financing or buying a car to buying a house. Here’s a look at how a good score can affect your life.
Benefits of Good Credit
- Receive better rates: According to USAA.com, your credit score can affect auto insurance rates depending on where you live, what type of car you own, and how much coverage you need. You could be eligible for better rates on your car if you maintain a strong credit rating.
- Buy or Lease a Car: Auto-financing can be significantly easier with stronger credit. When making a major purchase like a car, you may need to have the ability to receive financing. A poor credit history could jeopardize your chances of qualifying for financing or getting a good rate.
Hazards of Bad Credit
- You may have problems renting a house or an apartment: Looking for a house or apartment to rent? You may discover that your credit score is reviewed as part of the screening process. Poor credit history may negatively impact your chances.
- It could affect job prospects: Some employers conduct credit checks during the hiring process. LearnVest.com notes that for highly competitive positions, a bad credit score could affect your chances for employment.
- You may have to pay higher down payments: Unfortunately, if lenders deem you a credit risk, they may require you to put more money down on home loans or when financing your vehicle.
- You may find it tough to obtain pre-approval for purchases: When applying for a mortgage pre-approval, the lender reviews your credit history. With poor credit, you could have a tougher time gaining pre-approval. And according to SFGate.com, poor credit might preclude you from pre-approval entirely.
Does using cash or debit hurt your credit?
While using cash exclusively can help you avoid debt, it also prevents you from building a credit history. Similarly, debit cards pose the same dilemma. In both cases, you’re not demonstrating the ability to borrow money and pay it back responsibly, because doing so isn’t reflected in your credit history.
What’s your credit score?
If you’re curious about your own FICO score, we’re here to help. On July 19th, all Ally Auto customers will be able to view their FICO score for free by going to the “My Vehicles” page of our website and clicking “view my FICO score”. Knowing your FICO score and understanding its impacts can help you prepare for the auto finance process. Find out more at Ally Wallet Wise for helpful tips.
Do you have any surprising ways in which your credit has affected your life? Share with us in the comments below.
Comment on this article
Comments
Angelo M. on October 11, 2017 at 11:40pm
Good information
James A. on February 28, 2018 at 3:17am
I found the information to be quite helpful.
Ally on March 1, 2018 at 1:15pm
We're glad to hear that, James. Thanks for sharing your feedback!
Christina M. on March 21, 2018 at 2:47pm
I totally agree that have good credit is one thing I don't have. The process to get a car and home loan is slim to none for me right now. I wish I made better choices when it came to my credit. Right now I am without a car and home and the credit to get a loan for one. I know now the importance of credit and will be a better steward of it in the near future.
carol p. on March 28, 2018 at 1:22am
I know your credit is most important thing I make sure all my bills are taken care of to buy auto I am looking but I still have to wait for right time .
Phyllis M. on May 5, 2018 at 9:58pm
This information has been very resourceful. . I've always went with dealers financial ways. Not knowing has been costly, thanks for the information.
Carlos A. on January 4, 2019 at 5:32pm
you learn something every day
Linda f. on March 4, 2019 at 5:05am
Well i now I most likely have poor creit
Mike p. on May 4, 2019 at 3:10am
You cannot discount the fact that bad things happen to good people. I work for a company that cut my wages by 6.00 on the hour, and this put my family on the ropes. I will finally get my money back, so I cannot leave this job, but it took 10 yrs to get it, at a cost of 15,ooo dollars of lost wages for each year. It has been a long haul but ally has had my back the whole way, and working with me to try and stay on course. Yes you credit score is important but even more so is a company that knows that things can and do go wrong, due to know fault of your own and cares as much about their clients as they do their bottom line.
Ally on May 9, 2019 at 9:50am
Hi Mike, we appreciate your comment. Thank you for being an Ally customer. 😊
Tina D. on May 30, 2019 at 3:17pm
I have nothing but good to say about Ally!! I just recently paid off my auto loan and I am looking to get a new vehicle in the very near future (the previous one is getting old). I am hoping to stay with using Ally for my next one as well!
Ally on June 3, 2019 at 1:37pm
Hi Tina, we love hearing this! Thank you so much for being an Ally customer.
Sondra L. on July 13, 2019 at 12:28pm
With a credit score of 621, approximately what would my finance charge be for 11,000.00
Ally on July 18, 2019 at 2:20pm
Hi Sondra, we suggest you visit your local dealership and they will help you determine your financing options. You can find a dealer near you using Ally’s Dealer Locator: https://www.ally.com/auto/dealer-locator/
Mike c. on August 10, 2019 at 3:41pm
Can I finance a preowned vehicle through ally
Ally on August 10, 2019 at 3:45pm
Hi Mike, we suggest you visit your local dealership and they will help you determine your financing options. You can find a dealer near you using Ally’s Dealer Locator tool here: https://www.ally.com/auto/dealer-locator/
Steven J. on August 23, 2019 at 5:14pm
Great information!!!
Ally on August 28, 2019 at 1:42pm
Hi Steven, this is what we like to hear! Thanks for reading.
Jay on August 30, 2019 at 2:24pm
Ally interest rates for auto loans for those with scores less than 700 is ridiculous and unreal. It is hurting the economy. There are thousands of used cars on the dealer lots that people are not buying. I understand that there is a concern about payment. But there are auto withdrawal options to keep the rates low.
John W. on September 3, 2019 at 3:38pm
Can Ally be specific on which version Fico Score they use. Like Experian Auto 8, Auto 2. How about Transunion and Equifax. So many versions.
Ally on October 10, 2019 at 1:43pm
Hi John, if you'll please give us a call at 1-877-247-2559 one of our team members will be more than happy to advise further.
Susan E. on November 10, 2019 at 8:23pm
You should offer clients there FICO scores for just having an account with you. It would help clients to decided on buying a home or car
Ally on November 18, 2019 at 3:45pm
Hi Susan, thanks for the feedback. We’ll pass it along to our team.
Candace on February 1, 2020 at 3:22am
At the time of my purchase I had over a 700 credit score and still got a 14% apr through you guys. My income was also over over 70k and DTI was about 25%. So it’s not always true and you probably give incentives to dealers to increase the rates so they can money. Unfair to the hard working single moms that are just trying to live a normal life. You just look into dealers putting in false info