Perhaps the most important step in the car buying process is the loan itself. Your credit rating and the monthly payment you can afford is has a direct impact on what car and options you can purchase. What you’re buying also has an effect on the terms of the loan. The price of the car, your trade-in value, down payment and whether it’s new or used will also have an impact on the interest rate and the length of the loan.

Before undertaking a major purchase such as a house or car it’s a good idea to take a look at the credit reports and scores from all three agencies. You’ll want to be sure there are no errors, and if you’ve had some difficulties in the past you’ll want to be prepared to explain the circumstances that lead to them. Under federal law, you’re entitled to a free copy of your credit report from each agency once a year. However, credit scores don’t fall under that requirement. But the cost of obtaining your score from isn’t expensive and worth doing so you know what to expect when shopping for a loan.