The auto finance industry is one that’s full of acronyms, complicated terms and long words. We believe that you need to fully understand a situation to be able to make good decisions, which is why we regularly write these myth busting posts. This time, we are covering Copetown credit score.
Every time we hear something we know to not be true, we note it. Then we collate those notes together into a post so we can share the truth. That’s what today’s post is all about.
Our Copetown credit score auto loan team spends a few minutes busting some common myths around car finance.
- Checking your Copetown credit score will lower it
Not true. Checking your own credit score does not lower it. You can check it as many times as you like with zero impact on the score. The only checks that impact your credit score are hard inquiries used when you apply for credit.
Soft inquiries, like getting prequalified for an auto loan shouldn’t impact your score either.
- Leaving a balance outstanding on a credit card helps build credit
Not true. We have heard this myth a few times and it’s not true. Having an outstanding balance on a credit card does not help build credit. Paying your credit card every month helps build credit but leaving money outstanding does not.
Your credit score takes into account how much debt you have so arguably, leaving money on your credit card works against you if anything. That’s marginal though unless you’re talking thousands!
- Bad credit lasts for 6-7 years
Not true. A bankruptcy will stay on your credit report for that long but bad credit will not. There is no fixed term for bad credit. You can begin removing it immediately by repaying debt, making arrangements with anyone you owe, creating a positive payment history and getting your finances in order.
It generally takes between 18 months to two years to repair bad credit as it’s a cumulative process but nowhere near as long as 6-7 years!
- Bad credit means no more borrowing
Not true. Bad credit means more expensive loans and being much more careful with borrowing. It does not mean no more borrowing. We are bad credit car loan specialists so we would know!
Canadians find themselves with bad credit for all kinds of reasons, many of them not their own doing. It would be a little harsh to stop them all from accessing credit, which is where bad credit loans come in.
- Early repayment penalties mean you have to keep the loan for the whole term
Not true. You can still repay the loan at any time, you’ll just have to pay a fee.
Some Copetown auto loans come with repayment penalties included but these are usually for a set period and not the whole term. Some specialist loans will include early settlement fees but they are now few and far between.
What usually happens is that a loan will have an early repayment penalty for the first year or two and then that clause will expire. You can still repay the loan early if you want to within that time, the lender will just charge a fee, usually x months of interest on top of the settlement figure.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!