It’s no secret that credit plays a role when buying a vehicle. If you’ve ever wondered whether that impact goes beyond the amount you can borrow or whether you can lease a new Hyundai model, Keyes Hyundai has answers. Here, we cover the impact of Hyundai financing on your credit score.
Soft vs. Hard Credit Inquiries
There are two types of credit inquiries. One is used when you pre-qualify for a car loan or lease, and it’s called a “soft inquiry.” This is an estimate of your creditworthiness and does not impact your score.
The other type of credit check, called a “hard inquiry,“ is used when applying for financing. This is a deeper dive into credit utilization, payment history, and other vital metrics. Each hard inquiry will generally lower your credit score by a few points for a short period.
Mitigating the Impact
This isn’t a significant issue for most buyers, but it may be worrisome for those with no or low credit. However, there are a few things to remember.
- If you have good credit, making timely payments will keep it steady; if your score is low, those payments can help raise it.
- For those who rent their homes instead of owning, a car loan diversifies your credit mix; this can also give your score a significant boost over having mostly revolving credit.
- If your score improves and the rate for which you qualify drops, you may be able to refinance and save more.
Getting Approved for Financing with a Low Credit Score
If you’re buying a car now and your credit score is low, you may want to consider using a co-signer on your loan. If this person has a good score, it can improve your chances of getting a loan with a better interest rate than you could get on your own.
Hyundai Financing in Van Nuys, CA
Do you have more questions about financing? Get in touch with Keyes Hyundai near Los Angeles. Our staff can help you build, restore, or retain your credit with our many lease and loan options!
