October 3, 2023

When you’re looking to buy a car, the last thing you want to do is damage your credit score. A high credit score is essential for many reasons, including getting the best interest rates on mortgages and other loans. We will discuss five ways to finance a car without damaging your credit score. Keep reading to learn more.

1. Work Out a Deal With the Dealer

There are ways to purchase a car from a dealership without financing, and one of those options is to work out an in-house loan. Many dealerships will offer you an in-house loan if your credit score is healthy. An in-house loan allows you to pay off the car within 36 months without interest. It’s a great way to keep your credit score healthy and still purchase a new vehicle.

2. Purchase a Used Car With Cash

Purchasing a secondhand car can be helpful to keeping your credit score healthy because it prevents a long-term car loan from being added to your credit history. This is because it only takes a vehicle four years to significantly affect your credit score, while any more than six years will begin to decrease rapidly. In addition, buying a used car with cash allows you to get more for your money since it will depreciate at a lower rate.

3. Use a Credit Card That Offers Low Interest

Another way to finance a car while keeping your credit score healthy is by using a zero percent interest card through one of the major providers such as Chase or Discover cards. Both provide excellent options for financing a vehicle over 12 months. This is an ideal way to finance your vehicle while keeping your credit score healthy. You are only being charged interest on the amount that remains at the end of each month rather than having it accumulate across all twelve months.

4. Get Pre-Approved for Financing

Many people apply for financing to purchase a car only to be turned down later. These people may not realize that this can damage their credit score. You should allow the lenders to look at your financial background before applying so that you can get pre-approved. When you’re being considered for financing before using it, your chances of being approved are much higher.

5. Avoid Dealer Add-Ons

When purchasing a vehicle, many people forget about the extra costs accumulated when they drive off the lot. One of these costs is dealer add-ons. These are fees that the dealership tacks on to the pricing of your loan without you knowing. Although these may seem like just a couple of dollars, they can cost hundreds or even thousands of dollars by the time you sign your contract.


Keep these tips in mind when financing a car, and it will be easier to keep your credit score healthy. By following these steps, you will have a better chance of getting the vehicle that you want and avoid damaging your credit score.