Your credit score: you know it's important, but you don't know why. Or what it really means. Or how to improve it if it's "bad."

You need a crash course in Credit Score 101.

Luckily, you have our credit experts here at Denny Menholt Billings Nissan. We specialize in car loans for the credit-challenged, so not only can we can help you understand your credit score better, we can actually get you approved for an auto loan — no matter what your credit rating. 

Read on to learn everything you need to know about credit scores and car loans in Billings.

What Is a Credit Score?

A credit score is a three-digit number (between 300 and 850) that lenders use to determine your "creditworthiness," or your perceived ability to pay back a loan. The higher your credit score, the better.

Your credit score is based on your financial history. Because there are so many determining factors, and because there are three different credit bureaus reporting your credit information, your credit score can fluctuate regularly.

That's why it's important to keep a pulse on your current credit score — you never know when things may have changed.

Why Should I Care about My Credit Score?

Your credit score plays a key role in getting you approved for Billings car loans and other big purchases.

Lenders use your credit score to gauge how likely you are to pay them back. The higher your score, the lower your risk as a borrower — and, most likely, the lower your interest rate on any given loan.

In fact, a good credit score can save you thousands of dollars (think $5,000 on a $20,000 auto loan!).

Even if you're not thinking about applying for credit anytime soon, you should pay attention to your credit score. Along with impacting future credit applications, it also impacts other important decisions you might be making now — like your apartment lease, your home and auto insurance, or even your cell phone contract.

How Is My Credit Score Calculated?

Your credit score is determined by the three main credit reporting agencies: Experian, TransUnion, and Equifax.

Since each agency reports its own number, you technically have three different credit scores out there. However, since all three bureaus use the same main criteria to determine your FICO score, your credit scores should all fall within the same general range.

While there are several important factors at play, here are the five main factors that determine your credit score:

1. Payment history (35%)
2. Amounts owed (30%)
3. Length of credit history (15%)
4. Types of credit in use (10%)
5. New credit (10%)

To learn more about what these five different criteria entail, read this article.

How Can I Find My Credit Score?

By law, you are entitled to one free copy of your credit report from each of the three major credit bureaus every year. You can obtain these copies from AnnualCreditReport.com. 

However, those reports won't tell you your actual credit score — just the information your score is based on. For an actual number, you'll need to try one of these four ways to check your credit score:

1. Check your credit card or other loan statement.
2. Talk to a nonprofit counselor.
3. Use a credit score service.
4. Buy your credit score from a place like MyFICO.com.

It's a good idea to check your credit score regularly so you know where you're at (and so you can dispute any erroneous findings). Make sure these are mostly "soft" inquiries, though; too many "hard" inquiries can be a red flag for credit bureaus.

What Is Considered a "Good" Credit Score?

Okay, so you've got your credit score. Now, what does that score mean?

According to FICO, there are five main ranges of credit scores:

1. Exceptional: 800+
2. Very good: 740 – 799
3. Good: 670 – 739
4. Fair: 580 – 669
5. Poor: Less than 580

If you don't like where your credit score lies, don't panic. You can still get approved for Billings auto loans from lenders (like Denny Menholt Billings Nissan) who are willing to work with lower credit scores. Contact our finance department for more information.

What Can I Do to Improve My Credit?

If you aren't happy with your credit score — or even if you are — there are some things you can do to improve your credit.

Here are five quick tips for maintaining good credit health: 

1. Pay your bills on time.
2. Keep your balances low (less than 30% of your total credit limit).
3. Don't close old accounts.
4. Apply for credit sparingly (and shop within a short time frame).
5. Keep a close eye on your credit score.

How Can I Finance Cars for Sale in Montana with Bad Credit?

Stuck in that "poor" credit score range?

Believe it or not, your credit score isn't the only factor that car dealers in Billings use to determine your financing options. There are actually seven factors that dealerships consider for your auto loan — and six of them have nothing to do with your credit!

Plus, at Denny Menholt Billings Nissan, your job is your credit! That means as long as you have a job, you can get approved for Billings car loans. Seriously — it's that easy.

To learn more about our auto financing options, read about our car loans, or apply for a car loan online. All applications are accepted, and the approval process is fast and simple!