A bad credit score can be remedied
Has an underwhelming credit score or lack of credit history hindered you from buying a car in the past? Don’t worry, your credit score doesn’t have to keep you from buying the car you want any longer. We have several quick and easy solutions to help get you on track and into the car you’ve been searching for!
Your credit score allows lenders to assess the risk factor in lending you money. Your personal score is the result of many factors, including how many years you’ve had a credit history, your credit utilization rate (how high your balance is, relative to the credit limit on an account), your payment history (making sure you pay on time), and the types of credit on your report (think mortgages, credit cards, and student loans). The easiest way to gain actual credit if yours is nonexistent is to open a limited account and make the payments on time or in full before they are due.
Raise your credit score by:
- Only opening new accounts when absolutely necessary. Having multiple accounts and a wide range of debt is often a red flag to lenders.
- Paying off debt quickly. Even if you are making the minimum payment on time, sometimes having a high outstanding balance can negatively affect your credit score.
- Make payments on time. Delinquencies can lower your credit score very quickly if not resolved.
- Don’t move debt around. Instead of choosing to close unused accounts or switch lenders, it is better to just pay off the debt in full if you’re able. The credit utilization score is used to determine the amount of credit used versus the limit you’ve been given. Having a high limit but low balance can raise your score. This makes it a good idea to leave unused accounts open if you are able to refrain from overspending.
Don’t let a below average credit score scare you away. Instead, be diligent, know your score, and be proactive about improvement. You can also work with a dealership like Collierville Auto Center, who has a track record of working to get clients into the cars they want!