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Your credit score has a big impact on your applications for most things, especially loans. Most people only really think about how it impacts the likeliness that they will be approved for financing, but it actually effects a lot more than that. For instance, it has a major effect on what kind of interest rate you are going to be offered. It also affects how flexible the lender will be on things like payment schedules and the size of your down payment. But this isn't a one way relationship. While your credit score has an impact when you go to apply for loans on what kind of deal you will be receiving, the financing you receive will also have an effect on your credit score. Your credit score is made up of a variety of factors on your credit report. The amount of debt you have is a major one, and so is your payment history. The more on time payments and accounts in good standing it is that you have, the higher you will rank on the credit scale range. This means that if you make all of your payments on time on this new financing deal that you are getting you could use this as an opportunity to rebuild some of your payment history and help boost your credit score a considerable amount. Of course, when you first get the financing you can expect your score to take a slight drop because you are going to be adding to your debt amount quite a bit, but overtime as you pay this off and make your payments on time as mentioned above your rating will rise a fair amount. So not only does your credit score have an impact when you go to apply for financing, but the financing will impact your credit score as well, hopefully for the best as long as you make your payments on time. When you go to apply for the financing you would ideally have some time, at least a few months, to work on some improvement before hand and get to a good place on the credit scale. Getting your credit report and checking it for errors, and doing your best to take care of repairing any bad marks that you possibly can are on the top of that list. The better your rating is, the better deal you will get, which is why this is so important. A lower interest rate means less money owed overall which is a very big deal for your finances and you get a lower rate by having a higher credit score. This happens because when you have a higher score lenders want your business more and are more willing to be flexible and offer you a better deal to attract your business. So, the basis for what kind of impact your credit score has is that the higher credit score you have, the better deal you will be offered, the easier it will to get approval, and the more money you will save on interest rates.
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