Your credit rating is very important when it comes to applying for a car loan. Besides making sure that you look good in person when you walk in for your car application interview, you have to make sure that you look good on paper as well. And the only way to look good on paper is to possess a sterling credit record that would do any bank manager proud.

If you're clueless or unaware about your credit rating, it's certainly high time that you find it out for yourself.

The first and primary step to take when finding out your credit rating is approaching the three major credit bureaus for a copy of your credit report. These credit bureaus are Equifax, TransUnion and Experian.

These copies cost money so do expect to spend a little for it. Now, when you have the credit report with you, the first thing you should check out is your FICO score. A FICO score that is equivalent to 650 or above means that your car loan application is good as approved. Secondly, it also means you're entitled to have lower car loan interest rates than usual. This way, if some predatory car loan provider insists that you pay higher loans, you know right away that something fishy is going on.

Now, let's just say that you have a FICO score below 550. Such a score means that you look very bad indeed on paper. To rectify the matter, let's continue perusing the credit report but this time, we're concentrating on other information besides your FICO score.

This time, you're on a fact-finding mission, or rather, an error-finding one. Any error in your credit report will improve your credit rating so make sure that you look for it very carefully. If there's no error to be found, you have only one option left. And that's to look for car loan companies who accept customers with bad credit. Expect to pay higher interest charges however but if you want to own a car badly enough then maybe it wouldn't hurt that much.

Be prepared with the details! Make sure that your finances are in order because they'll be doing a credit check on you before proceeding with any further decision on your car loan application. Secondly, make sure that you possess all the information you might need about the car you're planning to buy, especially if it's a secondhand one.

Most banks are disinclined to give out car loans for secondhand cars because these are more prone to mechanical failures and more expensive to maintain.