Your credit score plays an important role when applying for vehicle financing, but there are plenty of misconceptions surrounding how credit works. Unfortunately, these credit score myths can stop people from applying for a car loan altogether, even when they may have financing options available.

At MyLoan, we speak with Ontario car buyers every day who assume their credit challenges automatically disqualify them from getting approved. In reality, many lenders look at far more than just a three-digit number.

Let's separate fact from fiction and explore some of the most common credit score myths every car buyer should know.

This is one of the biggest credit score myths in Canada.

While having excellent credit can help you qualify for more competitive financing rates, many people purchase vehicles with average, fair, or even poor credit scores.

Lenders often consider several factors when reviewing an application, including:

• Employment history
• Income and affordability
• Existing debt
• Down payment amount
• Credit history and recent payment trends

At MyLoan, we work with customers in all types of credit situations, including bad credit, no credit history, consumer proposals, and previous bankruptcies.

Having less-than-perfect credit does not automatically mean financing is out of reach.

Many Ontario buyers avoid checking their credit because they're afraid their score will drop.

Fortunately, this is usually false.

There are two types of credit checks:

Soft Credit Checks

Soft inquiries occur when you check your own credit score or use certain pre-approval tools. These do not affect your credit score.

Hard Credit Checks

Hard inquiries happen when a lender formally reviews your credit as part of a financing application. A hard inquiry may have a small temporary impact on your score.

At MyLoan, our pre-approval process uses a free Equifax soft credit check, allowing you to explore financing options without impacting your credit score.

A low credit score can make financing more challenging, but it doesn't necessarily mean you'll be declined.

Many lenders that specialize in vehicle financing understand that credit challenges happen. Job loss, divorce, unexpected expenses, or economic hardship can affect anyone.

Rather than focusing only on a credit score, lenders may also look at:

• Current employment
• Income stability
• Length of residence
• Debt-to-income ratio
• Overall financial picture

If your financial situation has improved recently, you may have more financing options than you think.

Paying cash for a vehicle can make sense for some buyers, but financing isn't always a bad thing.

In fact, responsible car financing can offer several advantages:

• Preserve savings for emergencies
• Keep cash available for other expenses
• Build or rebuild credit history
• Allow you to purchase a newer or more reliable vehicle

The key is choosing a vehicle and payment plan that fits comfortably within your budget.

At MyLoan, we encourage customers to think long term and choose financing that supports their overall financial goals.

This is one of the most common credit score myths we hear from Ontario drivers.

While bankruptcy does affect your credit history, many lenders offer financing programs specifically designed for people rebuilding their credit.

Approval depends on factors such as:

• Time since bankruptcy
• Employment and income
• Current financial obligations
• Down payment amount
• Overall credit profile

For many drivers, responsible vehicle financing becomes part of their credit rebuilding journey.

Every situation is different, but bankruptcy does not always mean the end of your financing options.

Many people believe closing old credit cards will instantly improve their credit score.

In reality, it can sometimes have the opposite effect.

Closing an older account may:

• Shorten your average credit history
• Increase your credit utilization ratio
• Reduce the amount of available credit you have

Before closing accounts, it's often a good idea to understand how the decision may affect your overall credit profile.

Thankfully, this is completely false.

Credit scores change over time and can improve with responsible financial habits.

Some ways to improve your credit score include:

• Making payments on time
• Keeping credit card balances low
• Avoiding unnecessary debt
• Monitoring your credit report for errors
• Maintaining a mix of credit types

Even small improvements can make a difference over time.

Many Ontario drivers who once struggled with credit have successfully rebuilt their scores and qualified for better financing options in the future.

Credit scores matter, but they are only one piece of the puzzle.

Believing common credit score myths can prevent you from exploring financing options that may actually be available to you. Every lender has different criteria, and every buyer's financial situation is unique.

At MyLoan, we believe in educating our customers and helping them make informed decisions. Whether you have excellent credit, bad credit, no credit history, or you're rebuilding after financial challenges, understanding the facts is the first step.

If you're considering buying a vehicle in Ontario, don't let myths stop you from exploring your options. You may have more opportunities available than you realize.