Even in these difficult economic times, a good portion of the population will be in the market for a new car. Before stepping through the doors of your favorite automobile dealership, though, take the time to find and review your credit scores. Consumers with good credit will find the car buying experience much more pleasant.

What are credit scores anyway? They are three digit numbers ranging from 300 to 850 that are based on a variety of factors. First, they are developed through a review of your payment patterns. Are you the type of person who routinely makes payments 30 to 60 days late? This fiscal approach immediately lowers your score significantly. Automobile financers ask themselves this question: “Who wants a customer that consistently pays late?”

In fact, when you got to apply for a loan, it really becomes a question of risk management on behalf of the lender. The decision to offer you, the consumer, any loan at all – and the rate of interest your loan will be set at – is also based on the information that the credit bureaus keep on file about you. It is a sort of financial biography of your life from the moment you become a credit using person in this country. Past due bills, defaults and other negative information is kept on file for seven years. Conversely, timely credit card payments and other appropriate credit uses are also available.

As this new information changes is filed, your credit score will tend to also change as well. While savvy credit users maintain a constant vigilance on their credit scores most people are unaware of even their existence. The single most advantageous approach to improving a credit score is securing a credit card and making timely monthly payments.

Consider this example. Gentleman A and Gentleman B both walk into a dealership to purchase the same automobile. Both decide they will purchase a new car for about $18.000 and would like to finance it for 36 months. When Gentleman A sit down with the finance department they discover he has a 710 credit score so he is offered a loan at 7.328% APR loan which translates to about a $550 monthly payment. Gentleman B’s credit score is a mere 510 and he is offered a car loan at 13.5 % APR. His monthly payment is about $650.

As you can see a lower credit score means a higher final price tag when buying used cars.