When you buy a car, figuring out the vehicle’s price is the easy part. A quick Google search will reveal its MSRP (the manufacturer’s suggested retail price, or the “sticker price”), and it doesn’t take much longer to get online price quotes from a list of dealerships.
But there’s another big factor that will affect your monthly payment: your credit tier. Often known as Tier 1/2/3, but also with letter grades or other designations, this refers to ranges of credit scores that qualify car buyers for different interest rates. These rates can vary widely based on your credit tier, and a higher interest rate can add thousands of dollars to the cost of your new car. In this article, we’ll discuss how these credit tiers are defined, how your tier will affect your car payment, and what you can do about it.