Nissan Finance

The finance department of a car dealership can be intimidating sometimes. We're here to help you understand what they're talking about with this handy car finance glossary.

Got more questions about financing? See our wonderful finance department, and they'll be happy to help you!

Most car owners go through a financing process when purchasing a new car, which means that credit is more important than ever. Essentially, your credit score tells lenders how responsible you are financially, making it more likely for you to get t a loan. Ranging from 300 to 850, this number might just determine when you get the car of your dreams or if you are stuck with some jalopy.

The central factor in your credit score is your financial history. Usually developed by the Fair Isaacs Corporation (FICO), your score consists of five central components:

Your payment history reflects how often you pay your bills on time and is responsible for thirty-five percent of your score. Amounts owed lets lenders know if you have borrowed large quantities and repaid them, letting financial institutions see that you can handle big loans, and makes up thirty percent of your score. The length of credit history means the longer you have had credit the more likely you are to maintain the status. This comprises fifteen percent of your score. Finally, the types of credit used (credit cards, car loans, mortgage payments, etc.) and the number of account inquiries each make up ten percent of your score.

As demonstrated by the score breakdown above, the most important element to maintaining a good credit score is paying your bills on time. Financial lenders like to see that you can handle regular payments on large sums. It is also important to demonstrate responsibility by using less than thirty percent of your credit at a time and by only borrowing when absolutely necessary.