When you apply for Lexus financing at Lexus of Valencia, you may wonder how the loan or lease will impact your credit score. We’re here to reassure you that while there may be a slight, temporary dip, responsible borrowing can improve your score over time. Let’s examine the big picture.
The Initial Impact on Your Credit Score
Credit checks are classified as either soft or hard inquiries. A soft check, like pre-qualifying for financing when you’re shopping for a new car, is a surface-level check that does not affect your credit score. A hard pull is conducted when you apply for a loan and increase your credit utilization; it’s much more thorough and will cause a small, temporary drop in your credit score.
Making Timely Payments is Key
If you’re establishing a credit history or protecting a high credit score, the thought of a decreased score may be dismaying. Don’t worry. Timely payments account for about 35% of your score, so yours will bounce back as long as you’re diligent.
Long-Term Credit Score Improvement
In the long run, a well-managed auto loan like those offered through Lexus financing can enhance your credit profile. It helps to diversify your credit mix – another factor in calculating your credit score. Moreover, as you consistently meet your loan payments, your credit score will not only recover but may also increase.
Lexus Financing Answers from Lexus of Valencia
Our goal at Lexus of Valencia is to help you understand every aspect of your vehicle purchase, from shopping to financing, so you’re secure in the result. If you have questions at any stage in the process, bring them to us. We’re committed to empowering you with knowledge and guiding you through the financing process.
