Did you know this about your credit score?
Your credit score and credit history determines whether you will be approved for a vehicle loan (or any other credit). If you are approved, the better your credit score and history is, the better terms you will be offered. The terms include the amount required for down payment, the amount the lender is willing to loan you, the interest rate and length of time the loan will be carried.
What helps your credit score?
- Having had credit in the past (credit card, credit line with a retail company such as a tire store).
- Handling that credit well. Did you make your payments on-time? Did you pay off the balance?
- Longer credit history, length of your credit history is determined by the date you opened your oldest credit account. Longer credit history can give you a higher your credit score. For this reason, it is a good idea to keep credit accounts in good standing, open, rather than close them.
What hurts your credit score?
- Applying for credit multiple times within a short period of time. Believe it or not, we see people who have applied 5 or more times within a couple of weeks. This is a big red flag to lenders and they shy away from people with multiple credit inquiries.
- Handling your credit poorly. Not making payments on-time and/or letting accounts go to collections is devastating to a credit score.
- Not having any credit history at all, though this is not nearly as bad as the previous two points.
Taking care of your credit score is very important.
YOU CAN IMPROVE YOUR CREDIT SCORE and get better loan terms. There are many resources available to help you develop a better credit score.
Come in to talk to us so we can refer you to a local resource that will work with you to improve your score. By working together, we can get you into an affordable and reliable vehicle.
In addition, here is an article with tips you may find helpful in improving your credit score: https://www.easybudgetblog.com/6-ways-to-raise-your-credit-score/
