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Build Your Credit Score by Buying a Used-Vehicle!

You might think that if you have a low credit score it is contradictory to buy a used vehicle and pay through financing rather than by paying cash, but it is A GREAT WAY TO BUILD YOUR CREDIT!

Obtaining a used-car loan is typically much easier than other types of loans! This is because dealerships, such as The Car Lot, work with many lenders and financial institutions so that they can find an interest rate that will please the customer. With a car loan, your spending will not get out of control. Your payments are set at a certain amount each month, and you are not given access to any extra credit, meaning there is less risk to the lender and you will be approved faster.

A car loan helps rebuild your credit because it shows creditors that you can make your payments on-time. The loan provider reports a person to the Credit Bureau when they obtain a car loan, and when they make their payments on time. As you begin to make payments on-time and show that you are responsible with the debt, your scores will increase.

Another way you will become a more desirable borrower is when you have a diverse credit portfolio, such as having credit cards, student loans, making timely bill payments, and auto loans! Making timely payments on your auto loan will contribute to your history of payments which makes up 35% of your credit score and add diversity to your portfolio, which makes up 10% of your score – meaning that having a car loan helps your credit grow in two different categories!

We can help you build your credit! Apply for financing and get approved in less than 3 minutes!

 

Oct 19th, 2017