When you have worked hard for a great credit score, you don’t want to do anything to risk it. Have you been considering Mazda financing but don’t want to take a financial risk? Our experts at Heritage Mazda Towson are outlining why it may (or may not) be right for you.
How Financing Helps Your Score
Financing can actually help your credit score, if done responsibly. For starters, when you demonstrate that you can borrow money responsibly, it can actually improve your score. This happens when you make regular, on-time, monthly payments.
Financing can also give you a better mix of debt, which you may not have had originally, which can also help.
How Financing Hurts Your Score
More often than not, you will see a small dip in your credit score when you first apply for a loan. This comes from the hard pull on your credit report with the initial inquiry. It’s also a result of the increase in debt.
Naturally, if you don’t make your payments on time, that can also be a big hit to your score, particularly if you pass that 30-day threshold.
What You Can Do
To put yourself in the best financial position, it’s important to shop responsibly. You want to make sure that you don’t stretch your budget too thin.
As a general rule of thumb, you should aim to keep your auto payment and expenses under 10 percent of your monthly take-home pay. If possible, try to make a down payment of at least 20 percent as well, which can limit how much you have to pay off in the future.
Learn More About MAZDA Financing in Lutherville, MD
Are you interested in applying for Mazda financing? Our financial experts are ready to help. Stop by Heritage Mazda Towson to get started today!
