Repair your Credit BEFORE buying your next vehicle
If you repair your credit before purchasing a car you will have more options when it comes time to buy. The majority of people do not purchase a car outright with cash usually they have to finance the vehicle with a bank. This can be done on your own through a credit union, a bank or even your insurance company. Another option is you can have the car dealership secure the financing for you.
How good your finance package is is directly related to your credit score. And of course there are other influences such as debt to income ratio and what your income is.
If you have poor credit, think a FICO score under 600, you will not have as many options for financing a car. Star Auto Sales has guaranteed financing and we can work with you even with a low score. But the terms aren’t always desirable.
However, you can improve your credit and this will open you up to many more options and not just for buying a car. A low credit score sends a message that you are unreliable. It is time to change that now.
Here are some starting points for improving your credit score:
Know what your credit score and report is.
Check your credit report to see what is on it. Dispute any errors with the credit bureau and reporting agency. You are entitled to a free credit report every year and it is worth checking. This can be done through the site AnnualCreditReport.com.
Pay your bills on time.
To repair your credit paying your bills on time is a must do! Whatever you have to do, do it. Set reminders. Set automatic payments. Many utility companies can draft directly from your bank account. Just make sure the money there is enough money in your account to cover the scheduled payments to avoid any overdraft fees. If you have a history of late payments over time they will fall off your the credit report but you have to accumulate a history of paying your bills ontime.
Reduce your debt.
Paying off money owed will improve your credit over time and it will feel great. This may mean not purchasing items for a while and not incurring additional debt. Paying off the principal on high interest credit cards, outstanding bills or student loans will increase the debt to income ratio. When banks see a high percentage of your income goes to paying off debt that sends a red flag. to repair your credit you have to reduce your debt.
Avoid Unnecessary Credit Dings.
Frequent credit pulls can have a negative affect on your credit score which can happen if you hop around from dealership to dealership. Speak with a finance specialist before you start shopping to avoid negative credit dings.
There are many other suggestions for improving your credit. Using an app like Mint.com is free and can help you track your expenditures and create new habits. For additional resources the FICO site has lots of suggestions. Or you can ask a Finance Specialist here at Star Auto Sales. A better credit score generally means a better interest rate and therefore a lower monthly payment.