How Healthy Car Habits Can Positively Affect Your Credit & Lifestyle

Car driving at sunset.

A good credit score is much more than simply paying your bills on time. Those with the best credit tend to have overall healthy habits, like only buying necessities and keeping luxuries to a minimum. They also make smart decisions when making big purchases, carefully maintain their belongings, and live a fiscally responsible lifestyle.

So how can you mirror these healthy habits in a way that will have a positive effect on your credit? Consider one of the biggest ticket items you own: Your car. If you’re working to increase savings and build your credit, it’s important to save money wherever possible and do your best to prevent emergency situations down the road. While we can’t predict when a car will need a major repair, there are many things we can do to protect against damage due to neglect.

Keep reading for tips on how practicing car maintenance can instill good habits to protect your credit.

Timely Loan Payments:

One of the easiest ways to improve your credit is to establish a history of on-time payments. Paying your auto loan on time will improve the payment history element of your credit score. As you pay down your loan balance, your credit utilization will also decrease (another credit score influencer). If your loan term is anywhere from 3-5 years, you’ll be able to impact your age of credit history.  These three elements make up your aggregated credit score.If everything is done right, keeping up with your auto loan can assist in you building your credit score!

Reduce Expenses:

The next thing you can do to impact your credit is reduce your expenses. When it comes to your car, there are many things you can do to cut down costs.

1.   Analyze your expenses

To understand how your auto bills stack up against the average, compile a list of your different expenses. Typical car expenses include gas, repairs, maintenance, loans, insurance, taxes and finance charges, and mileage. Total up how much you spend and then compare it against averages you find online. This will give you a big picture idea of where you may have an opportunity to save.

[Read: Why It’s Important to Evaluate Your Auto Insurance]

2.   Establish smart gasoline purchasing habits

One of the biggest day-to-day expenses associated with car ownership is gasoline. While purchasing inexpensive gas will certainly save you a buck or two when you fill up, it is not worth driving across town for. When you fill up, be mindful about which type of gas you use. If your car requires regular gas, you won’t benefit from filling your tank with premium.

Another great way to save on gas is by enrolling in a local grocery discount program. Many stores have rewards programs that will save you money on gas when you shop with them. Ask the cashier next time you pick up your groceries and get signed up so you can start saving! Another way to save is to use helpful apps, such as Gas Buddy, in order to find the best gas prices in your area.

3.   Purchase wisely

Cars are now more efficient than ever. While an electric or hybrid car will surely save you money on fuel, they also cost more upfront. Just because you aren’t in a position to buy a Tesla, that doesn’t mean you can’t still save money. Before making your car purchase, check the vehicle’s average miles per gallon for both city and highway driving and whether the car takes regular or premium fuel.

[Read: Tips for Buying a New Car or Truck]

Purchasing wisely also includes being aware of the seller’s reputation. If you’re purchasing a used car, never make an impulsive decision. Verify the car’s history by checking the Carfax and make sure you read all the fine print to ensure you’re purchasing from a reputable dealer.

4.   Finance responsibly

Be wary of any dealer that will offer financing to anyone, regardless of their credit, as they tend to be less reputable. While negotiating, focus more on the overall price than the monthly payment, and don’t agree to a car loan longer than four to five years. Be conscious of your budget and don’t get lured into spending more than you originally decided!

Perform Regular Car Maintenance:

Consider any vehicular maintenance that you do on a regular basis as a way to prevent future repairs. Be mindful about the way you care for your car and you’ll likely save yourself a lot of money.

Here are some key ways you can keep your car in top shape:

1.   Check and replace the oil

In addition to checking your oil level each month, it’s important to check the condition of the oil itself. Make sure the oil is free of debris and doesn’t smell burnt. If it does, this could be a sign of engine damage. Most cars should have the oil replaced every 3,000 miles to prevent engine damage.

2.   Keep an eye on your tires

Not only is it wise to check the tread on your tires a couple times a year, you should also monitor how the tires are wearing. If they look uneven, that’s a sign that it’s time for an alignment.

3.   Check your coolant

Many people like to leave this up to their mechanic, but checking the antifreeze levels in a car is fairly simple. If you find debris or discolored coolant, you may have an issue with your radiator.

4.   Check belts and hoses

Get familiar with what’s going on under your car’s hood. Keep an eye out for wear on your belts and hoses and have them replaced whenever necessary.

5.   Know the age of your battery

Most car batteries have a sticker stating when it was bought and how long it will last. Keep a record of its expiry date and replace accordingly.

Now that you have a plan to keep your auto finances in check and car in good shape, you can take these same healthy habits and apply them to other aspects of your life. The more fiscally responsible you are, the healthier your credit and bank account will be. Need help getting your finances and credit on the right track? Take a look at Greater Nevada Credit Union’s various financial education resources to help get you started.