If you don't already know find out what your credit score is. The three digit score is known as a FICO score. There are three major credit bureaus that assign scores: TransUnion, Experian and Equifax. The score shows the likelihood of your paying back the loan on time. It is based on the length of your credit history, the credit you already have and the number of recent credit applications you have submitted. The average credit score in the United States is 694. The higher the score the lower risk you are to lend to. The scores can range from 300 to 850.
You can get one free credit report per year online, by law, from each of these three bureaus. Go to www.annualcreditreport.com for your free report. There isn't usually a big variance in the scores from the different bureaus. If you get a free report from one agency at a time you can get a free credit report three times a year.
If you have a credit score of 680 or above you should be able to finance your used car with good terms. If your credit score is below 680 you should consider shopping at bad credit car dealers who offer private financing.
You can also take steps to improve your credit score. First, check your credit report for any errors. Look for errors in late payment or unpaid credit. If you find any correct them by contacting the company reporting them. This is the easiest way to improve your credit score.
Paying your bills on time is another important step. One third of your credit score is based on your payment history which includes any late payments and foreclosures. One third of your credit score is based on the total amount of balances you owe versus your total credit limit. It is best to keep your balances to less than 80% of your credit limit on your credit cards to keep your score high for this factor.
Other important factors are a long history of active accounts which shows you are a good credit risk, responsible use of credit showing timely payments on all debt and a low incidence of new credit applications.