There is nothing worse than setting out to buy a new or top quality used vehicle from Springfield Hyundai only to be turned down or offered financing with a high rate of interest because of a poor credit score. Unfortunately, our financing experts spend a lot of time working to find a loan for customers who find out the hard way that they have credit issues that prevent them from securing affordable financing or obtaining financing at all. If you are among those whose credit score could use a little help, here are three important ways you can work to improve your chances of credit approval.
Improve Your Credit Approval
|Serving Springfield, Drexel Hills & Clifton Heights, PA|
One of the most common reasons why people’s credit scores are lower than they should be is the simple fact they are consistently late on their payments. Late payments are one of the leading causes of significant drops in a person’s credit score according to Entrepreneur Magazine.
When it comes to any kind of loan, including credit cards, you must make the minimum payment due on time every month. You can’t afford any exceptions to this as the lenders are quick to report late payments. If you are excessively late or default on a loan, the results can be and typically are disastrous to your credit score. More importantly, the impact to your credit score can last for up to seven years.
Just having one or more credit cards is going to have an impact on your credit score. At the same time, your payment history for each card will also impact your score. The one thing that many people do not realize is that the balance they carry on their credit cards can also have a significant impact on their credit score. Experts recommend that you keep the balance on your credit cards to below 1/3rd of the total available credit.
If your balances are higher than this, consider paying them down, you might be surprised at just how much this simple change will make to your credit score. Alternatively, you can try to spread your current balance out over several cards. However, before you do this, take a good look at the interest rates you are going to be paying and be sure you will not end up paying more than you might by paying down the cards you have. You might also be better off if you can score one low-interest card and transfer your balances.
Many of our customers have no idea what is on their credit report until they come in to apply for a loan, then they get a nasty shock. No one is going to tell you that you have negative items on your credit report until you apply for a loan. The only way to overcome this is to regularly monitor your credit report. Each agency must by law give you one free copy of your credit report each year. Use these to dispute any negative items and have them removed from your report. You will need to provide the agency with proof of the inaccuracy and it can take up to 30 days to have the items removed.