Three Effective Ways to Repair Your Credit When Seeking a Loan for a New Car

16 October 2018
 Categories: Finance & Money, Blog


When you buy a new vehicle, a huge factor that will determine your interest rate is your credit. If your credit score is poor, then you won't be able to get a good interest rate and you'll end up paying way more. Fortunately, there are plenty of ways you can repair this score before seeking a loan for a new vehicle. 

Pay Bills on Time 

Failing to pay your bills on time can drastically affect your credit score in a negative way. It shows that you're careless with your finances and makes creditors very hesitant to do business with you.

That's why it's so important to pay every single bill on time. To better manage this task, you should consider setting up payment reminders on your phone. Then when a bill is coming up, a reminder in your phone will go off to ensure you make a timely payment. You'll never miss a payment again. 

Reduce Credit Card Debt 

Having a lot of debt on credit cards doesn't do your credit score any justice. Credit card debt is probably one of the most common reasons why people have poor credit. Fortunately, dealing with this debt isn't impossible. You just need to budget appropriately. Find ways you can save money, whether it's not going out to eat as much or limiting your shopping. This extra money can then go towards a debt repayment plan. Just note that repaying all of your debts will not happen overnight; it's a gradual process that you need to stick to each week.

Work with a Credit Counselor 

Just like when people get help from therapists for mental problems, you can get help from credit counselors for credit issues. These specialists have helped many clients just like yourself build up their credit and attain auto loans without any problems.

First, they'll assess your overall credit history. They'll see what existing debts you owe and thoroughly examine your financial income. They'll then tailor a specific plan to get your credit back up where it needs to be. This might involve opening new lines of credit, making timely payments, and cutting out unnecessary expenses. Speak with a credit counselor, such as Optimal Credit, to get started. 

Just because you have poor credit, doesn't mean you don't deserve a brand-new vehicle. You certainly can purchase one, you just need to make it a priority to improve your credit score if it's poor. There are plenty of tactics and resources you can use today. It will just take some work and patience on your part.