Did you know that you can build your credit with a car loan? Good Fellow’s Auto Wholesalers is going to explain to you how this is possible. When you make routine payments on time, it shows lenders that you are a trustworthy candidate to lend money to. In turn, this means that if have a used car loan that you are making payments on time, then it will work to build up your credit score. Now let’s dive into some of the advantages of building credit this way.
Car Loans Are Secured Loans
Do you know the difference between a secured and an unsecured loan? Well, a secured loan is a type of loan that is reinforced by collateral. This means, that if you were not making payments on time, the collateral can be repossessed. In a car loan case, the vehicle is the collateral. Because collateral can be collected with a secured loan, typically there is a lower interest rate than compared to an unsecured loan. Unsecured loans have no collateral to collect so their rates are typically higher. This is just one advantage to why you should choose a car loan to build your credit with.
You Need Credit to Build Credit
If you would like to improve your credit score, it’s important that you are making your monthly payments on time and in full. This shows lenders that you are able to manage your payments responsibly. You can also open a new form of a credit to help you rebuild your score. That’s where a used car loan can actually benefit you. Even if you have enough money to pay off the loan, you should keep the loan open so that you can continue to make your monthly payments on time. This type of pattern will help build your credit score and make you a trustworthy candidate to lend money to in the future.
Get Approved Easier With a Car Loan
Generally, Canadians who have a credit score under 670 are considered subprime. Subprime loans are available to these types of people who have a credit score that falls below average. Many dealerships cannot help these types of car buyers, but our used car dealership can. If you apply for a car loan with our team and with this type of credit score, our team will help give you an affordable auto financing solution along with a reliable vehicle.
How We Can Help
Good Fellow’s Auto Wholesalers is your go-to used car dealership in Toronto. This is because our team is well trained in getting you the best used car loan solution no matter what your credit score is. If you are looking for additional reasons to build your credit with a used car loan, our team is here to tell you more. You can give our friendly team a call today at 1 (855) 581-9590 and we would be happy to answer all of your questions.