When it comes to buying a used car, many people rely on loans to make the purchase affordable. However, not everyone pays the same interest rate on their car loan. The amount you pay depends heavily on your credit score. Understanding how your credit score impacts your used car loan interest rate can help you save money and make smarter financial decisions.

What is a Credit Score?

A credit score is a three-digit number that represents your creditworthiness. It’s based on your credit history, including repayment behaviour, outstanding debts, and the length of your credit history. Lenders use this score to assess the risk of lending you money. The higher your score, the more trustworthy you appear to lenders.