Quick Ways to Boost Your Credit Score Before Getting a Car

If you have bad credit, you might be understandably nervous if you need dealer financing to buy a new car. While there are bad credit car loans that can help you out, you can help yourself by doing everything you can to boost your credit score before applying for financing. Try a few good tips in the months leading up to your purchase.

Look At Your Credit Report

If you haven’t already, order your free credit report and take a look at it to see if there’s any out-of-date or incorrect information that needs to be cleared up before lenders run your credit. Should there be any inaccurate information on your report, getting it cleared up could boost your credit score a few points. Make sure you request a free report from both Equifax Canada and TransUnion Canada.

Take Care of As Much of Your Debt As Possible

Do everything you can to pay down your smaller debts before you apply for financing. In addition to smaller amounts owed, focusing on those that have higher interest rates is also a good idea. A sizeable percentage of your credit score is determined by how much of your credit limit you’re currently using, so getting that number as low as you can is sure to go a long way in polishing that credit score.

Increase Your Credit Limit

Going back to your credit limit, there’s a chance you might qualify for a higher credit limit with your current credit card companies. You’ll have a better chance of being approved for a limit increase if you’ve paid your credit card bill on time, have been a customer for a while and don’t use too much of your credit. If you’re approved for a limit increase, pretend as if your limit hasn’t changed to keep your credit limit use low on your credit report and your credit score high.

If you can only boost your score by a few points, that’s better than nothing. Lenders like to see you making an effort, and that effort could help you receive approval for your loan.

Car Loans Are a Good Thing.

If you are thinking about buying a car but are not sure whether or not to buy a car using a car loan, then we are happy to share with you some of the many reasons why we think buying a car with a car loan is a wise choice for many of our customers. When our customers apply for car loans, they are sometimes concerned about issues related to their finances, such as bad credit, the loan amount that they may qualify for, and interest rates. However, there are many other factors that go into determining whether a car loan is right for you.

Here are a few things that you may want to think about when determining whether or not to get a car loan:

It helps you get a good car now

Many of our customers tell us that they are trying to decide between getting a good car with a car loan or settling for a car that only meets their short-term needs that they can buy with cash. From a safety, long-term investment, and overall quality perspective, we generally encourage our customers to get a car loan that allows them to buy a car that will suit their long-term needs and current lifestyle. We can offer competitive interest rates that will help these customers to keep low monthly loan repayment amounts that they can easily afford – no matter how long they plan to keep the car loan.

You can refinance

One issue that comes up with many of our customers with bad credit is the fact that customers with bad credit generally have to pay greater interest rates and qualify for lower loan amounts. When customers have bad credit, we encourage them to go ahead and get the safe and reliable car – even if it means paying more for their cars now. A few years down the road, paying those loan repayments each month will result in a higher credit score. With that higher credit score, they can refinance their car loans in order to save money down the road – but they’ll still have that safe and reliable car.

It’s easy

Getting a car loan is easier than some people might imagine. In fact, getting a car loan can be done in the same day that you apply – and you can begin the process from the comfort of your own home or office. Simply complete the credit application online to get started right where you’re sitting!

We look forward to helping you get the best car loan for your needs. Contact us today to get started!

Car Financing That Works

Finding a used car in good condition can be a great deal. They are affordable and you often get excellent value for your money. Once you have identified the car you want, you need to get through the used car financing process to pay for it. Know what to expect and be prepared.

Know What You Can Afford

Used cars cost several thousand dollars, and taxes and registration fees can add up. Take a look at your personal financial situation and estimate what payments you can afford and how money much you are prepared to put down. A larger down payment will lower the principle balance of the loan and reduce your monthly payments. If you can’t afford a down payment towards the value of the vehicle, at least try to have enough to cover the cost of taxes and fees. Also, make sure your monthly payment fits within your budget comfortably.

Financing Options

Borrowing money costs money. The interest rate is the price you pay to use the lender’s funds to purchase your car. A higher interest rate will increase the overall cost of your car and contribute to higher monthly payments. Having excellent credit can help to lower interest and finance charges.

The term of the loan is how long it will take you to pay it back. It is possible to lower the monthly payment to fit your budget by stretching the payments out over a longer period of time. This may increase the interest rate slightly and will impact the total finance charges as well.

Additional Payments

It’s always a good idea to protect the value of your car with an extended warranty. It is your responsibility to maintain and repair your vehicle, and it can end up costing you thousands of dollars to fix a major mechanical problem. Mechanical issues are no excuse for missing your loan payments. It is a good idea to consider adding an extended warranty. It may cost a little more up front, but will protect you from those unexpected expenses in the long run.

It is illegal to drive without auto insurance. When purchasing your vehicle, consider the monthly insurance premiums as well. Most lenders will require you to carry full insurance. Have your insurance set up ahead of time so that your lender is prepared to fund the deal without delay.