Lots of people suffered hardships through the financial meltdown that happened in 2008 and 2009, but that’s mostly over with, and it’s time to get back on track with your credit. There are plenty of car outlets that would like to sell you a car, so if you need one, now is a good time to go car hunting. But before you head out the door, you should do a few things to get started.
You Should Check Your Own Credit With a Free Credit Check
There are several companies that offer these free credit checks, and you don’t need to sign up for a yearly plan, but you should check your own credit at least once per year and know exactly what’s on it. If there is something you don’t recognize, take action, find out what it is, where it came from and why it’s there. If it’s an error, start writing letters to get it fixed, don’t let up, be persistent.
If you don’t belong to a Credit Union, find out what’s available to you and join at least one or two. They usually offer the best rates, easy terms, and have lower qualifications than most car lot loan companies. In almost all areas, there are Credit Unions available to certain groups of people based on employment, military service, retired people, and even geographic area. Get payroll deduction if it’s offered.
If You’re In a Rebuilding Stage With Your Credit, A Car Loan Is Excellent Credit
Some mortgages only report occasionally to the credit bureaus, and some only when you’re late. consumer loans, on the other hand, usually are really good at reporting monthly, and if you can get payroll deduction where you work, you’ll never be late, ever. That’s a huge advantage when you’re wanting to get more credit and a higher credit score.
You’re also more likely to get accepted for a loan if you have several years on the job, and they can see that you’ve already put payroll deduction in place for savings. Then all they need to do is deduct your car payments from your savings account and you’re all set.
Regular Consumer Retail Car Loans Are Still Good For Your Credit
Since they’re loaning money on a car, that is the that they’re counting on if you are unable to pay back the loan. As long as the balance on the loan isn’t higher than the current value of the car, they’re covered. If you stop paying, they’ll come get your car. While that is both good and bad, you’re more likely to get a car loan than you are a home loan because they’re so easy to repossess.
These types of car loans are not only easier to get, but they report to the credit bureaus on a regular basis as well. If you really have your goal set on getting a home mortgage, buying and paying for a car in installments is a very good way to improve your credit rating.
Once you’ve paid on a car loan for a year or so, you’re in prime position to try for a home mortgage. Keep checking your credit and always pay on time, or just a little early, to keep your credit as perfect as you can.