Buying a car is one of the most important financial decisions that you will have to make. Unfortunately, it can be a bit overwhelming to sift through all the different options for cars and financing. Let us help you clear up some of your confusion.

Q: How do I get a loan?

A: To get a loan, you first have to apply either on your own at a financial institution or through a dealership. The latter will send your single credit application to multiple lenders, saving you time. Since dealerships work with lenders on a daily basis, a quick response is almost guaranteed. Lenders will look over your application, check your credit score, and either decline your application or offer you a loan with a set of terms that include length, interest rate, and monthly payment amount, among others.

How do I get pre-approved for a loan?

A: Getting pre-approved for a loan isn’t a bad idea, but it could hurt your credit score if you stretch your applications over weeks or months. To get pre-approved for a loan, head to a financial institution like a credit union or bank. Fill out an application and submit it. After that, all you can do is wait.

Q: How do I improve my credit score?

A: To improve your credit score, pay your bills on time, pay off your balances, avoid opening unnecessary credit accounts, and try to keep a good credit mix. Your credit score will also improve if you have a credit history that’s positive. By simply paying your bills and not incurring large amounts of debt that you can’t pay back, your credit score will improve over time.

Q: Should I lease a vehicle?

A: When you lease a vehicle, you pay a set amount of money each month. This amount is generally how much the value of the car will depreciate in the time that you have it.

At the end of the contract, you may be able to purchase the car for the difference between what you’ve paid and what the car is worth. Whether or not leasing a car is right for you depends on how long you plan on using the car, how many miles you will drive it each year, and how much you’re willing to pay.

Do I need a cosigner?

A: If you have any deficiencies in your credit history, you may be required to obtain a co-signer on your loan. The loan shows up on both your credit history, as well as the cosigner’s credit history, and they are responsible for the money if you do not come up with a payment. It’s important to think this relationship through before asking someone to cosign for a loan.