If you have been declined car loans in the past, you know how painful that can be for your self-esteem. Our Grimsby auto loans team are giving you a crash course on how you can fix your credit, so you never have to go through that trauma again.
Get a copy of your credit report, it is free
Start by getting a free copy of your credit report from Equifax and TransUnion. Also, sign up for free credit reporting services like Credit Karma so you can keep tabs on your score.
Look over the reports for any mistakes, even small errors like your address can impact your credit score.
You can dispute these mistakes at no cost, each reporting agency will have their dispute process listed on their website. When you have these disputed items removed, it can have a positive impact on your credit score, so do spend some time reviewing the reports.
Identifying the causes of your low credit score
The next thing you have to do is look for any potential delinquent or past due accounts. Missed payments are the main reason why your credit score will drop. Until these delinquent and past due accounts are paid up, it can make getting a new car loan almost impossible.
Let’s play devil’s advocate, imagine someone is asking you for a large sum of money to buy a car but they have a history of not paying their bills on time, are you going to give them the money? (These lenders do not know you personally and are basing their decision solely on the credit report and income documents you provide).
Once you have dealt with the missed payments, you should look at the total amount of debt you are carrying. If your credit utilization rate is over 40%, that will bring down your credit score. You can improve your score by paying down these debts but that will take some time.
Establishing a budget is another important task you should work on. You have to keep tabs on the total amount of money coming in and also how much is going out.
The prospective lender will want to know whether you are making enough money to repay the Grimsby car loan and all of your other debts. If you have a budget already worked out, you will know how much cash is left over at the end of the month to go towards the car loan.
If all of this seems like a lot of work, there are resources available for free. The best resource we can recommend is to visit a local car dealership, they can show you how to repair your credit and assess your budget.
When you work with a local dealership, you will have complete peace of mind knowing you stand the best chance of getting approved for a car loan. There is light at the end of the tunnel and the first step towards that light is to speak with a dealership representative as soon as possible.
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!