You’re in the market for a new or new-to-you vehicle.

 

But there’s a problem – your credit is less than stellar.

 

To get a vehicle with a decent APR and a payment you can afford, you’re going to have to do some credit repair.

 

And the sooner the better.

 

Follow these steps to repair your credit and open up the opportunities to buy the vehicle you want.

 

Let’s dive in.

It’s all about your credit score

When we talk about repairing your credit, what we’re really referring to is your credit score. It’s the number that lenders will look at to see how much of a risk you are in terms of letting you borrow money.

 

A high score is good, a low one is a challenge.

 

Here’s how to give your score a much-needed boost.

1. You need open accounts that are in good standing

Your credit score is a numerical representation of how you’ve managed your previous accounts. 

 

If you don’t have any open accounts or your accounts are delinquent, your credit score will be poor.

 

You can fix this by having accounts open that you’re making regular payments on. One way to start this process is to get a secured credit card and start making regular, on-time payments. 

 

There are credit cards that are also credit cards that are geared toward people who need to boost their scores.

2. Be punctual about paying all your bills

Your payment history has the biggest effect on your credit score. 

 

As you continue to make on-time payments, your credit score will go up.

 

But keep in mind that even one late payment has the potential to signal to lenders that you haven’t changed your ways.

 

This includes accounts that are listed on your credit report, too. They can be added if you get too far behind.

3. Avoid collections 

Any account could eventually end up as a black mark on your credit report. That includes small things that you may not consider, such as a library fine or your child’s school lunch charges.

4. Pay down balances and keep them low

One of the factors that affect your credit is the amount of debt you have. Keep your credit card balances low. It’s recommended that your debt be no more than 10% of your credit score.

5. Pay attention to credit limits

Part of your credit score comes from the ratio of debt you have on your credit cards to the amount of credit left.

 

To put it simply, if you’re trying to repair your credit, don’t max out your credit cards.

6. Age matters

Not YOUR age! The age of your accounts.

 

Your credit score is influenced by how long you’ve had your oldest account. Reporting agencies also take an average of how “old” all your accounts are.

 

It looks good for you to have old accounts that are still active.

7. Be careful about opening new accounts

Your credit score will take a bit of a hit when you open a new account, so do so sparingly.

 

Of course, there are times that you have no choice, so choose wisely.

Get to work repairing your credit

Don’t get discouraged.

 

By following these seven steps carefully and diligently, you’ll get your credit score to a point that allows you to purchase a new vehicle at a price your budget can handle.

 

If you have questions, you can always ask the experts at Kasper Auto Group!

 
Categories: Finance