There are few things better than the thrill of being handed the keys to a
new (or new to you) car, truck, or SUV. Thanks to in-house financing
dealerships in Utah, it’s fairly easy to buy your vehicle with an auto loan.
However, if you’ve been working on your credit, you may wonder what kind of
impact an auto loan will have on your score. Here are a few important things
you need to know.
Applying May Cause a Temporary Dip
When you apply for an auto loan, you give the lender permission to run a
credit check on you. This generates a “hard inquiry,” which may cause your
credit score to temporarily drop. On average, a hard inquiry can create a 5 to 10-point
drop, which typically clears in about a year.
When you have multiple hard inquiries within a 14 to 45-day time frame, the
credit agencies count this as a single inquiry. This gives you the ability to
shop around for the best loan offer without negatively impacting your
credit score.
Outside this window, each hard inquiry could reduce your score by another 5
to 10 points. So, you may not want to make more than one major purchase - for
example, a new car and a new home - in the same year, as this could create
enough of a drop to keep you from getting the best interest rates.
A New Loan May Lower the Average Age of Your Accounts
When credit agencies calculate your credit score, approximately 15% is based
on the average length of time all of your accounts have been open. When you
take out a new loan, this lowers your overall average account age.
If you have several accounts that have been open for a while, this may not
have a big impact. However, if you’re just starting to build or
rebuild your credit, it could be more significant. For example, assume you have
only one account that has been open for a year. If you take out a new auto
loan, your average account age would drop from one year to just six months.
Auto Loans Don’t Impact Your Credit Utilization
Your credit utilization is the amount of revolving credit debt you’re
carrying each month compared to your credit limits. This makes up
approximately 30% of your credit score. The good news here is that an auto loan
is not considered “revolving” credit, so it will not increase your utilization
rate and will not impact this portion of your credit score.
An Auto Loan Could Help Your Credit Score
Are you ready for the really good news? Buying a car from Fast
Start Auto could actually improve your credit score. There are two reasons for
this. First, having an auto loan can improve your credit mix, which accounts
for about 10% of your credit score. When you have multiple types of accounts, for
example, a mortgage loan and a credit card, this shows that you’re able to
responsibly handle different types of credit. If you only have one or two types
of accounts right now, an auto loan can improve the mix and increase your
score.
Secondly, consistently making loan payments on time is one of the best ways
to build your credit score. So as long as you don’t miss payments or pay late,
your score could improve with each monthly payment you make on your new auto
loan.
If you’re ready to start looking at a new vehicle, the team at Fast Start Auto is here to help.
Visit our showroom today and see for yourself why we’re one of the top in-house financing
dealerships in Utah.
All Locations
| Mon: | 9:00am - 8:00pm |
| Tue: | 9:00am - 8:00pm |
| Wed: | 9:00am - 8:00pm |
| Thu: | 9:00am - 8:00pm |
| Fri: | 9:00am - 8:00pm |
| Sat: | 9:00am - 6:00pm |
| Sun: | Closed |
Used BHPH Cars Salt Lake City Utah
At Fast Start Auto, we feel that we have the best used Cars, Trucks, SUVs and Vans in Salt Lake City UT, Midvale and West Valley! If you are looking for a slightly used or pre-owned vehicle you have come to the right place. Here at Fast Start Auto in Salt Lake City UT, Midvale and West Valley we offer “Buy Here Pay Here” auto financing to consumers in Salt Lake City UT, Midvale and West Valley with bruised credit, damaged credit or just plain bad credit. Traditionally the type of inventory that most BHPH dealers’ stock is late model and have high mileage, but here at Fast Start Auto we make sure to stock the best used cars in all of Salt Lake City UT, Midvale and West Valley! Do you have Bad Credit? If so that’s ok! Have you ever been divorced or had a repossession, again that’s ok because here at Fast Start Auto we offer Buy Here Pay Here auto financing to all residents in Salt Lake City UT, Midvale and West Valley! Here at Fast Start Auto we understand your situation and are willing to help you get into the Car, Truck, SUV or Van of your dreams today! If you need an auto loan in Salt Lake City UT, Midvale and West Valley then you have found the right place, wither your one of our many repeat customers or you’re a first time car buyer in Salt Lake City UT, Midvale and West Valley with bad/baby credit or have things on your credit report that are holding you back from your automotive dreams then come down to see us at Fast Start Auto, we will make sure to get you into the car that you deserve at the price you can afford. We feel that we have the best used Cars, Trucks, SUVs and Vans in all of Salt Lake City UT, Midvale and West Valley! We offer the best Buy Here Pay Here deals in all of Salt Lake City UT, Midvale and West Valley then other Buy Here Pay Here dealer. Here at Fast Start Auto you will notice the difference, we take pride in our inventory and it shows! We make sure to go the extra mile to make sure that all our customers are completely satisfied with vehicle that they drive home with. Most BHPH dealers just want to make a quick buck and leave you fighting for funds. They will sell you an automobile that will run for a couple months and then break down on you and still leave you with that annoying monthly payment. Well not at Fast Start Auto, we make sure to run all our Cars, Trucks, SUVs and Vans through an extremely rigorous inspection before we stamp the Fast Start Auto name on any vehicle on our lot! BHPH “Buy Here Pay Here” means that no traditional bank approval is necessary to purchase a vehicle at Fast Start Auto. Even if your FICO score is less than 600, which would traditionally prohibit a resident from Salt Lake City UT, Midvale and West Valley! from buying a vehicle, well here at Fast Start Auto we will go the extra mile to make sure that you drive off the lot in an amazing Car, Truck, SUV or Van. So what are you waiting for come on down to Fast Start Auto today and see how we are becoming the best BHPH dealer in Salt Lake City UT, Midvale and West Valley!
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