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How to Improve Credit when Buying a Car in Canada [2022]

How to Improve Credit when Buying a Car in Canada [2022]

Posted by on Feb 24, 2022 - Archived under Uncategorized

Suppose you were recently denied a car loan due to bad credit. In that case, you might be considering ways to improve credit when buying a car in Canada.

 

There are numerous credit repair service providers online; they all claim to get you results for a nominal upfront payment.

 

Unfortunately, while a small percentage of these firms are able to actually deliver on their promise, most lack the skills needed to effectively address your credit issues.

 

Understanding the root cause of your credit issues

 

Going for credit repair without first understanding the root cause of your credit issues is like taking a prescription without going to a doctor; it just doesn’t make sense.

 

Get a free copy of your credit report from Equifax and TransUnion; make it a habit to review your credit at least once a month, so nothing catches you by surprise.

 

Apps like Credit Karma are one resource you might consider using instead of paying for credit monitoring services.

 

Your score will range anywhere from 300 up to 900; take your time reviewing the report because each credit reporting agency uses its own scoring system.

 

Causes of low credit scores

 

Nothing impacts your credit score like missing payments; in fact, it is the leading cause of low credit scores.

 

Your credit utilization and mix of credit products will impact your score, but, ultimately, it is whether you repay your debts as agreed that has the great impact.

 

How to Improve Credit when Buying a Car in Canada

 

Once you have established why your credit score is low, the decision is yours on whether you want to rectify the problem.

 

Having a low credit score will make leading a normal life almost impossible and very expensive.

 

Presuming you want to turn things around, focus on paying down all of the accounts that are past due or in collections.

 

While you work on paying off those debts, it would be smart to create a budget, so you know precisely how much money you have available once all of your debts are paid.

 

When your budget is complete, you will now know how much money you can put towards a car payment. Since the average Canadian car payment is in the 500 to 600 dollar range, try to keep that in mind.

 

How to buy a car when your credit is below average

 

There are lenders who will give you a car loan even when your credit is below average.

 

You will not be able to purchase a new car, these loans come with a higher interest rate, so the best you can afford is a used car.

 

The easiest way to access these lenders and find cars within your budget is by going through a local car dealership.

 

These dealerships have the ability to get you approved with the right lender and can schedule test drives of all the cars in their inventory.

 

You can buy a car without going through credit repair service providers. Just stick with these suggestions, and everything will go smoothly.

 

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!

 

Click here to get approved for your next car loan online today! we have a team of credit specialists ready to help you with buying a car with poor credit score, and will work with you no matter your credit score. 

 

For any questions or concerns, please don’t hesitate to contact us here! 

 

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