A car loan is very useful especially if you do not have enough money to pay for it in full. If you are out looking for great deals with small interest rates, you better make sure that your credit score is in good shape.
- Check your credit score. Your credit score should range within 300-850. The higher your score is the better. In order to get that car you’ve been dreaming off your score must be 650 or higher. That is already the boundary between good credit score and poor. A score lower than 650 won’t get you that car you’ve been dreaming off. Although some would still be willing to transact with you, the consequence is that you’ll be given a higher interest rate. With an interest of 5% or higher, you could be saving hundreds or even thousands in the long run.
- Another thing you have to take care of is your credit report. Your credit report will contain your past activities and this may determine whether or not you will get that car. Check your credit report regularly; you get a free credit report annually from the 3 credit agencies so just ask for a new copy from those three agencies every 3-4 months. Scan it for false claims and errors and report them immediately to your agency to get them off of your report as soon as possible. Errors in your record can affect your chances with that car.
- Next, if you want to improve your credit for that car, better make sure that you pay your bills on time. That move can give quick boosts to your score. And of course, not paying on time will just get you in trouble. Don’t forget that not paying in time will get your score marked for 7 years or even more. And they’re not easy to get rid of.
Remember that dealers often do a background check on customers before giving the go signal. They want to make sure that you are not a risk and that you will pay them on time. So it’s best to improve your score first before you go out looking for deals.
A good credit score will do more than get you a car, it will be easier for you to get other loans and it will also save you tons of money. Give your score a little push and it will be all worth it in the end.
Joy Mali is an active blogger and shares extremely interesting financial management tips over the web that helps people to improve credit scores & build a working credit report.