Have you ever toyed with the idea of buying a car but are not sure if you have the credit in order to do so? If you have a bad credit score, you may end up paying more for your car in interest than you would normally have.
What conditions give you a poor credit score?
There are many ways you can avoid getting a poor credit score that will make your car loan suffer. Follow these tips to avoid getting into the wrong side with the creditors, but if you do end up there due to unavoidable circumstances, don’t worry, we will follow this up with advice on how to improve the situation.
1. Bankruptcy
It does become difficult to keep you afloat in finances in this current economy. If you have a record of bankruptcy on your account, it may affect your credit score negatively. But don’t worry – there are many avenues such as Insta Auto Loan that provide financial help especially to people who have filed bankruptcy or are experiencing credit issues.
2. Bills overdue
If you have been unable to keep up with the regular bill payments, the credit companies will take it out by dropping your credit scores. So even if you are stretched thin with your finances, try not to skip too many payments at once.
3. Be out of reach
The biggest mistake you can make is to fall off the grid when the credit companies are trying to get in touch with you about outstanding payments. This will permanently scar your credit history and impact all future credit actions.
How can you improve your credit score?
If you are planning to make a huge payment on your credit card, like take out a car loan, you must make sure that your credit situation is improved as much as possible so that you do not accumulate more debt than you already have. Some of the ways you can help yourself is by doing the following.
1. Pay your bills
Making regular monthly payments on your credit card is essential, but if you are having trouble arranging that, you should at least make the minimum payments on time and speak with your creditors to arrange a repayment plan that you can afford.
2. Buy the car
Creditors are happy to see you make large payments on your credit card as this means they’ll be making more profits. So buy the car that you need but make sure you keep up with your monthly payments as well. This will make a good impression on the company and your score will improve.
3. Credit scores can change quickly
Never underestimate the change you can bring to your credit score in a short time by following up with your payments regularly and changing a few other financial habits. Therefore it is never too late to improve your situation.
