Improving Your Credit So You Can Get a Better Car Loan

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Your car takes you everywhere you need to go. What happens when it no longer runs and you need a new car? Can you qualify for a car loan with the credit you have? If not, there are some options to help you improve your credit score for a car loan. The following are some steps to get you there.

1. Begin Paying Debts on Time

If you have a credit score, but it’s not so great because of your past payment history, make a decision today to get those debts paid on time every month. If you happen upon a month where finances are tight and you’re not sure you’ll be able to make a certain payment, contact the creditor and see if they will grant you an extension. If not, do a little something extra to find the funds and make that payment.

If you have no credit, it’s probably time to apply for a credit account. Start with something simple like a department store card or a credit card with a low limit. Once you open the account, be consistent on your payments, making sure they are in on time and in full every month.

2. Check for Errors and Get Rid of Them

TransUnion, Experian and Equifax all allow debtors a free report once per year. Request your statement every year and look it over. The FTC reports a quarter of consumer reports containing errors that could affect credit. If you do find errors, whether it’s your own doing or that of a creditor, dispute it with the bureau that contains the error. You can typically do this online, though contacting someone directly by phone is also an option.

3. Give Your Credit Limit Some Space

Just because you have a card with a $500 limit, doesn’t mean you have to max it out at $500 all the time. Credit utilization plays a role on what your credit score will look like. If you have a big expense coming up in the foreseeable future, pay down your account with micropayments beforehand. 

If you’re worried about doing that, you can contact the issuer of your card and request a credit limit increase. Be prepared to ask if you can do this without having a hard credit inquiry, as this could take your score down for a short period of time as well.

Another way to give your credit limit some space is to consolidate debt. When you get rid of card balances, your utilization is lowered, which ultimately offers you more points to your overall credit score.

4. Take Advantage of Tradelines

If you’re really looking forward to that new car, one great way to improve your credit is through tradelines. With a company such as Coast Tradelines, you become an authorized user on accounts that already have a long history of positive numbers. Though you won’t have access to any of the account information, and can therefore not use any of the actual credit, it will appear on your credit history to boost your score. It’s 100% legal and easy to do.

5. Time It Out Correctly

When you apply for a new credit line, a hard credit inquiry is done. That inquiry will be on your report for anywhere from 6 to 24 months, and during that time it will pull your score down. What this means is if you are applying for credit lines in order to build credit, make sure you time the applications correctly. Refrain from applying for multiple credit lines all at once, or even within the same year. 

After you have applied for one and received a hard credit inquiry, check your report a half a year later, and then another half a year after that to see when the inquiry is removed and your credit score is restored. At that point, it would be safe to try again.

Contacting the Professionals

When you need to boost your credit score for a car loan, you do have some options. Though it also takes patience and some time, you can get that credit score up, which means you can apply for your car loan in just a short amount of time. Contact Coast Tradelines today at 202-945-9556, or book a call to learn more.