Rebuild Your Credit Score with Harris Mazda
If you have a bad credit score, you might feel like you won’t ever get a loan–especially a car loan. As Harris Mazda, we’ll help you find the loan and payment plan for a new or used car that’s right for you, no matter what your credit score. We’ll also help you rebuild your credit so you can get your life back on track in the Nanaimo, Duncan, and Victoria area. See how it’s possible at Harris Mazda today.
Bad Credit? No Credit?
When you have a low credit score, life can be harder for you. If your credit score is 619 or below on the FICO scale, you qualify as a bad credit risk in the eyes of many lenders. Even if you have a standard credit score of between 620 and 679, you might have trouble. This may disqualify you for many loans, or might give you terms in a loan that can cost you thousands of dollars more than you’d usually pay during the terms of the loan. You might even have higher insurance premiums. If your credit score is low due to situations like a divorce, bankruptcy, or simply bad luck, you’ll need to improve your credit score.
How is a Credit Score Calculated?
Credit score calculations are performed according to formula created by credit agencies like Experian, Equifax, and TransUnion. The exact formula is kept a secret, but it it’s heavily influenced by your ability to pay back debts such as credit card debts, car or house loans, and other similar debts. Credit scores are there to let potential lenders such as car dealerships know how likely you are to pay your debts on time and in full. Someone with a low credit score is considered to be a bad credit risk, which can make lenders less willing to give you a loan.
What are Some Ways to Improve a Credit Score?
The first step in improving your credit score is checking your credit report. You can get a free credit report from Equifax, Experian, or TransUnion, which are the three credit bureaus that determine credit scores. You can check your credit report for fraud, errors, and other issues, and dispute them if needed with each credit bureau.
Next, you’ll need to catch up on your payments. Make sure that you know where you owe money, and start to pay off your accounts as soon as possible. If it’s not possible for you to pay off all of your accounts at once, call your creditors and let them know that you’ll need some help arranging your payments. If you’re having trouble with this step, you can also find a credit counseling agency that will help you create a payment plan.
There are other ways you can help improve your credit score. A long credit history means a better credit score, but that history may be gone if you close a credit card account. If you can avoid closing credit accounts, it will help you retain a good credit score. If it’s necessary to close a credit account, try to close newer accounts rather than old ones.
How Can a Car Loan Help You Improve Your Credit?
One of the most crucial steps in repairing a bad credit score is catching up on payments and paying your bills on time. A payment plan may help you catch up on your existing payments, but what if that’s not enough? Once you’ve gotten current with your existing debts, you’ll need to find ways to build up your credit score further.
A car loan can be a great way to demonstrate your responsibility in handling credit and money. It can be one of the easiest loans to get, as many dealerships such as Harris Mazda are willing to work with buyers who have bad or nonexistent credit scores. Once you have secured a car loan, making your payments on time and in full can help you raise your credit score. A car loan is an installment loan, so there’s a set amount to pay and a set date, making it easier to catch up on your payments instead of being at risk of falling behind.