If your credit score is below average or just poor in general, there is no need to feel alone. There are millions who face this same problem, and you shouldn’t feel ashamed. You also shouldn’t feel as though you are stuck in a pit of neverending despair.
Here is five steps to improve your credit—s o you can get back on track to afford a good auto loan:
Step One – Get a Free Copy of your credit report.
There are a number of places where you can acquire a free credit report, and you are for the most part allowed one free copy per year. Our first step is to acquire this report. There are a number of reasons and benefits to having a copy of your credit report. One being it will allow you to know exactly where your credit stands. Second it will allow you to pinpoint you trends, in terms of which debts you owe, but also whether you are late on payments or not, so you can correct it. Lastly, you might notice some charge-offs, or late payments that you don’t remember, or don’t belong to you. This provides you a detailed look into what loan providers are looking at when considering your future loans.
Step Two –Start disputing incorrect information.
The next big step is to highlight and note each chargeoff or late payment on your credit report you feel might be wrong. Even if they aren’t incorrect, it is still worth disputing, as there is a high chance the dispute will win, and that bit may be removed from your credit report—thus improving your credit score. Now if you are looking for a good 5 year or shorter term automotive loan, you need to get your credit score up—or your interest rate will cripple you long-term. Dispute whatever you feel like disputing.
Step Three—Pay off your debts and negotiate pay offs.
If you owe debt, either in collections or maybe even older loans (consumer, mortgage or student debts). Either way you need to face these debts, don’t avoid them. If you can’t pay the amount they want you to pay, you can attempt to negotiate. In most cases debt collectors are willing to negotiate, and you can easily setup something as small as a $50 a month payment. This will help your credit report moving forward as it will report as you have started to make payments on time, and shows you are taking responsibility for your debts.
Step Four—Make payments on time.
Some people like to pus that grace period on their credit cards, or other bills. Your best bet is to make sure you are making payments on time. They say almost a third of your credit score is a reflection of how consistent you are with your on time payments. Missing just one or consecutive payments could hurt your score a bit more than you can imagine. It also reflects badly for those who are considering on giving you an automotive loan. No creditor will want to provide a loan to someone they can’t trust.
Step Five – Patience is key.
Debt is a hindrance, and a poor credit score is the result. But it isn’t the end. You can get yourself out of that hole. It just takes time, and most of all patience. Be patient, work on the four steps above, and when you feel you are ready and happy with your score. Start shopping for the automotive loan you want.
Related Article: “ 10 Ways to Improve Your Credit Score” – www.mred.com