 TITLE: Which Credit Score Is Used for Car Loans? CONTENT: Improve Your Credit Score Before Buying a Car\n---------------------------------------------\nIf you check your credit scores and think it might be best to work on your credit before taking out an auto loan, here are some suggestions for improving your credit:\n*   **Pay down credit card balances.** Your credit utilization rate is the percentage of your revolving account (credit card) limits that you're currently using, and it's an important credit scoring factor. To figure out your utilization rate, divide your total credit card balances by your total credit limits. The lower your utilization rate, the better. If you currently have a high utilization rate (over 30%), paying down credit card balances could be a quick way to increase your credit scores.\n*   **Consolidate credit card debt.** If you can't afford to pay down your credit card balances, you could apply for a debt consolidation loan and use the money to pay off your credit cards. Installment loans, such as personal loans, won't impact your utilization rate. As a result, transferring the debt from credit cards to a personal loan could improve your scores—as long as you don't then charge up those cards again.\n*   **Keep your credit cards open.** Closing your credit cards, even a card you never use, will lower your available credit and increase your utilization rate. There are exceptions, though. For instance, some people may want to close their credit cards if they have trouble avoiding overspending or the card has an annual fee that doesn't seem worth paying.\n*   **Continue paying bills on time.** Even one late payment could hurt your credit scores, and you want to make sure your recent credit history is as clean as possible before applying for a new loan.\n*   **Hold off on other loan applications.** Applying for a new loan and taking on additional debt could hurt your credit scores. Unless you have a pressing need, such as consolidating debt, it may be best to pause new credit card or loan applications until after you buy a car.\n*   **Review your credit reports for errors.** Double-check your three credit reports for errors that may be hurting your scores and file a dispute if you find one. The credit bureau must investigate your claim and either validate, update or delete the information.\nThese actions could improve all of your credit scores, which can make it easier to get approved for an auto loan with a favorable rate.\nDon't Overthink Your Credit Scores\n----------------------------------\nWhile your credit scores can be important, there are three reasons that it makes more sense to focus on general healthy credit habits rather than a specific score:\n1.  Many consumer credit scoring models use similar criteria to determine your score.\n2.  You don't know which scoring model an auto lender will use.\n3.  If you apply for financing through a dealership, the finance office may submit your application to multiple lenders that could use different scores.\nBuilding a positive credit history can help increase all your credit scores, and you won't need to worry about which score the lender uses. END