Should I repair my credit before applying for a car loan?
You can certainly improve parts of your credit before you apply for a car loan. However, there are auto loans that can improve your credit score as long as you have it – two birds with one stone!
Credit repair and auto loans
You don’t need to have good credit to get a car loan, but it definitely helps. There are some things you can do to repair your credit before applying for a car loan, but building a good credit score can take years.
It’s a good idea to always work on your credit, but improve your credit in no time may not be enough to get approval from traditional lenders if your credit score is too low.
While there are loan options for bad credit borrowers, nothing says you can’t give your credit score a quick boost before you go out and look for a lender.
Prepare With Quick Credit Repair Tips
If you need a vehicle right away, you may not have a full year or more to work on your credit score. However, there are few quick things you can do to increase your credit before applying for a car loan.
- Pay off your credit cards. If your credit card balances are at 30% or more of their borrowing limits, it can really lower your credit score. Pay off your credit cards as much as possible before applying for auto financing. It may take a few weeks for your repaid credit cards to reflect on your credit score, as most creditors typically only report balances once a month.
- Correct mistakes on your credit reports. Errors can occur on credit reports and they can sometimes hurt your credit score. Old accounts that have already been paid off, or don’t even belong to you, can lower your score. You can dispute inaccurate accounts and have them deleted with proof, which can increase your credit score.
- Pay your bills on time. Payment history is the most important factor in determining your credit score. While this isn’t a quick fix, make sure you don’t miss any payments before applying for a car loan, as missed payments can take a big toll on your credit. Missed or late payments stay on your credit reports for up to seven years.
- Do not close old, unused accounts. If you have old lines of credit that you barely use and plan to close them, don’t! The length of your credit history is also a determining factor in your credit score. Closing old accounts can reduce the average age of your credit history. Even if you don’t use the accounts often, keeping them open could save you a drop in your credit score.
These credit repair tips can give your credit score a boost before applying for an auto loan. However, if you need a vehicle fast and don’t have the time to correct your credit score, subprime auto financing could be your next step. You can also visit https://www.paydaynow.net/
Subprime auto financing
If your credit score isn’t recovering as quickly as you hoped, or if you just don’t have time to heal your credit reports, try subprime auto loans.
Subprime lenders look at more factors than your credit score when you apply for a car loan. These factors usually include your life stability, work history, income, credit reports, etc.
Stability is one of the key things lenders look at when you apply. The longer you live in the same area and have a job in the same field, the better your chances of getting approved for a subprime auto loan.
In addition to getting a second chance at auto financing, subprime auto loans are reported to the credit bureaus. Some used car lots that use inside financing don’t report their loans, which means your credit score doesn’t improve by making your car payments on time. Subprime lenders, however, report their loans so that your on-time payments can create a positive payment history and repair your credit in the long term.
Finding a subprime auto lender means finding a dealership who has signed up with them, also called a Special Finance dealership. If you don’t know where to start, don’t worry, because we know how to help you.
Finding a car loan for bad credit
Over the past 20 years, we have built a nationwide network of special finance dealers here at Auto Express Credit. We work to match borrowers struggling with credit problems with dealers who have the loan options they need for their credit.
To get started, fill out our car loan application form. After that, we will search for a dealer in your area, free of charge and without obligation.