• The average price of a new vehicle is an estimated $45,869, according to a recent forecast.
• Unless you're paying cash for a car, you should consider what interest rate you may qualify for based on your credit score.
• Lenders also use other factors in their loan determination but your score is an aspect of the purchase that feeds directly into what rate you may get.

By now, you probably know that prices for new cars have been climbing at a brisk pace, along with many other consumer goods, in the midst of high inflation.

The average cost of a car is an estimated $45,869, according to a recent joint forecast from J.D. Power and LMC Automotive. Adding to the sting are rising interest rates, which make the cost of financing a new vehicle more expensive.

Yet that aspect of the purchase (the rate you get) is what you may have the most control over — through your credit score.

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That important three-digit number typically ranges from 300 to 850 and is used in all sorts of consumer credit decisions. While you likely know that higher scores mean better interest rates for borrowed money, you may not realize how that translates into savings.

For example, based on a credit score ranging up to 850: If you were to finance $45,000 over five years with a score in the 720-to-850 range, the average interest rate would be about 4.7%, according to a FICO (Fair Isaac Corporation) calculator using data as of Aug. 15. That compares to an average rate of nearly 17% for a score falling between 500 and 589.

Dollar-wise, that higher rate would mean paying more than $16,333 extra over the life of the loan ($21,947 for a score below 590 vs. $5,614 with a score of 720 or higher). The chart below illustrates how the payments and total interest paid are higher the lower the score is.

While it's hard to know which credit score will be used by a lender — they have options — having a general goal of avoiding dings on your credit report helps your score, regardless of the specific one used, experts say.

"Some of the easiest ways to boost your credit score include checking your credit report for errors and keeping your open accounts in good standing — the latter means that you need to pay all your credit bills on time and in full each month," said Jill Gonzalez, an analyst and spokesperson for personal finance website WalletHub.

"You can also improve your score by keeping unused accounts open, as this helps build a long credit history which is essential for a good credit score," she said.

Be aware that loan approval is not based solely on that three-digit number, said Gonzalez.

"Lenders don't only look at your credit score, as it doesn't tell the full story," she said. "They will also check your full credit report, as well as employment status, income and other assets or monthly expenses."

Figure out what you can afford

To check for mistakes and get a sense of what lenders would see if they pull your credit report, you can get a free copy from each of the three big credit reporting firms — Equifax, Experian and TransUnion. Those reports are available weekly for free through the end of this year due to the pandemic. (In typical years, you can only get them for free once annually.)

If you're unsure where to start, there are online calculators — including one from WalletHub — that can help you figure out how much car you can realistically afford.

"After you've established that, you can start by contacting local banks and credit unions to find the best interest rate, and see if they'll pre-approve you," Gonzalez said.