You're in the market for a new car, but your credit score is preventing you from being approved for financing. Don't give up. Just because you have bad credit now doesn't mean it will stay that way. In fact, with a little hard work and patience, you can improve your credit score so you can purchase the car you want. Here are three steps you can take that will help you repair your credit so you can get approved for your new car loan.
Look at Your Credit Report
If you don't know what's on your credit report, you may be ruining your chances of getting approved for the car loan you need. Even minor mistakes can lower your credit score, which will also reduce your chances of being approved for loans. Take a look at your credit report. Take notes on each and every error that you find.
Contact the credit reporting agency and file a formal dispute for each error. The credit reporting agencies are required by law to investigate each dispute you file. Once the errors are adjusted your credit score should go up, which will make it easier to get approved.
Get a Secured Credit Card
Whether you're just starting out and have no established credit history, or you've had some financial difficulties and have to start over, a secured credit card can help you get your credit on track. Secured credit cards allow you to obtain credit cards once you deposit money into a savings account.
Your credit limit is based upon the size of the initial deposit you make. For instance, if you deposit $500 in a savings account, the initial credit limit for your secured credit card will be $500. Once you've made a predetermined amount of timely payments, your savings account will be returned to you and your secured credit card will be transferred to an unsecured card.
Pay Down Debt
If you already have credit cards, but you're maxed out on the limits, you might want to pay the balance down before applying for a new car loan. Being maxed out on your credit cards can cause your credit score to take a nose-dive. To protect your credit, you should try to keep the balance on your credit cards as low as possible.
If your credit is preventing you from securing a new car loan, use the tips provided here to elevate your credit score.
Share17 May 2016
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