3 Common Misconceptions About Loans
The process of applying for a car loan can be an arduous process. What can make it more stressful is trying to better your credit score so you can get approved by lenders. We get it, and we know how to make things easier for you. There are a lot of misconceptions about car loans out there that can muddle things, like what lenders want to see before approving you. The next time you get ready to apply for a car loan, keep in mind these common misconceptions about loans; it’ll save you on time, stress, and money.
- Every time someone runs your credit, your score goes down.
Many believe that for every time you have your credit checked (or a lender looks into your credit), your score is negatively impacted. However, multiple checks on your credit that are car loan or home mortgage related within a one to two-week time window actually won’t have an effect on your credit score at all.
- Your age and marital status affects your credit score.
Your age, and whether or not you’re married or single does not have an effect on your credit score. Neither does your geographic location, ethnicity, or religion. What does impact your score is whether or not you have high balances on credit cards, missed payments, filed bankruptcy, or have taken out unnecessary loans.
- Co-signing on a loan will not affect my score as much compared to applying for the loan by myself.
Signing your name as a co-signer is equivalent to applying for the loan on your own in the eyes of lenders; you and your fellow co-signer are equally responsible for making sure the lenders are receiving payments. If you decide to co-sign on a loan, your score can actually decrease just the same too, even if it was decided that you’re not the one who is primarily responsible for making the actual payments. However, your credit score can go back up, as long as the payments for the loan are being made on time; one missed payment can have a detrimental impact on your score.