How to Improve Your Credit to Get the Best Car Loan

May 23rd, 2014 by

A car is one of the most important purchases you will make. Yet, if you don’t have good credit, it can be difficult getting good terms for a loan or even getting approved for a loan at all. You could find yourself going from dealer to dealer and finding the doors slammed in your faced at each turn.

Doing everything you can to improve your credit score before you start looking for a car can improve your odds of getting a loan and getting the best terms. Even a minor improvement in your credit score can make a big difference to the type of loan you get.

Pay Off Delinquencies

There’s nothing you can do about late payments on your credit report except wait them out and try to balance them out with good credit behavior. However, if you have a delinquency, that will continue to hurt you for years. Paying off your delinquencies may not automatically increase your credit score, but it will make you a lot more attractive in the eyes of lenders.

Transfer Balances

When your credit cards are maxed out, that hurts your credit score. Maxing out cards makes it look like you can’t control your debt. Instead, transfer some of those balances to cards that have low or no balances. Having several cards with a balance around one-fourth to one-third of the limit is better than having a couple of cards that are maxed out.

Check Your Report

Errors on your report can seriously hurt your credit score. Pull your credit report and check it for accuracy. Make sure no accounts have been opened in your name. Ensure that all paid delinquencies are showing up as closed or have been deleted. Double-check your name and address. Every detail on your credit report can influence whether or not you get a good loan. Make sure all the information is correct. If you find an error, report it immediately.

Though you won’t notice a dramatic rise in your credit score with these measures, they will make your credit report more enticing to lenders. Even if you have a low credit score, working with buy here pay here dealers gives you another option for car financing. These dealerships offer credit to many lenders who can’t get financing from traditional lenders because of problems with their credit. You can get buy here pay here financing to get the car of your dreams while also taking advantage of the opportunity to start rebuilding your credit with timely payments.