When attempting to secure any financial agreement, undergoing a credit check is required. For those with a good credit history, this is nothing to worry about. However, if you struggle with bad credit, this process can produce stress and anxiety. Good Fellow’s Auto Wholesaler, one of the best Used Car Dealerships in Toronto, is here to help you increase your chance of a car loan application approval with this guide. Together let’s explore effective strategies you can use to improve your credit score.
Understanding Credit Scores
A credit score serves as a reflection of an individual’s creditworthiness, based on their credit report. Ranging from 300 to 900, a higher score indicates lower credit risk, with a score of around 660 or higher considered good. Various factors influence credit scores, including payment history, credit utilization, recent credit inquiries, and public records. The significance of credit scores is that lenders often rely on them to assess the risk associated with lending. A positive credit history signals reliability, while a negative one raises concerns about repayment ability.
How to Improve a Credit Score
If you are struggling with poor credit, there are options for you as there are ways you can improve your score. Below, we have summarized the most beneficial ways to improve your credit to help you get approved for a used car loan.
- Timely Payments. Consistently meeting payment deadlines for bills, credit cards, and loans is critical. Ensuring sufficient funds are available in your account prevents missed payments and maintains a positive credit history.
- Credit Utilization. Avoid exceeding credit limits to prevent damaging effects on your credit score. When you can use less than 35% of your available credit, it demonstrates responsible credit management and enhances your creditworthiness.
- Credit Checks. Limit frequent credit inquiries to avoid signalling financial desperation to lenders. Checking credit often can signal that you are living beyond your means and it will not reflect well.
- Diversify Credit Types. Utilize various credit types, such as loans, credit cards, and lines of credit, responsibly to diversify your credit profile. Timely repayments across different credit accounts contribute positively to your credit score.
Navigating Bad Credit for Car Loans
In Canada, no matter what your credit score is, obtaining a car loan is still achievable. Bad credit car loans are helpful as they give opportunities to people who need a second chance. And – if the monthly payments are fulfilled on time and in full, one can even notice an improved credit score. As well, when applying for a bad credit car loan, ensure you are well versed in factors like insurance costs, interest rates, maintenance costs, and repair costs.
How Our Used Car Dealership Can Help
No matter your credit score, our dealership at Good Fellow’s Auto Wholesaler is committed to assisting you in increasing your chances of loan approval. Follow these strategies outlined above for a smoother application process and contact our team when you’re ready to apply for a Bad Credit Car Loan. Contact us at 1 (855) 581-9590 today.