When you need a car but your credit isn't in the best shape, there's no need to try and repair it beforehand as long as you're working with the right lender. If you still want to work on your credit, however, there are several options you can use.
3 Easy Steps to Improving Your Credit Score
You can improve your credit score over time yourself by making a few simple changes to your financial habits, among other things. In order to start your credit repair journey, you need to know your credit score and what's on your credit reports.
You can get copies of your credit reports from each of the three major credit bureaus – TransUnion, Experian, and Equifax – by visiting www.annualcreditreport.com. You're allowed a free copy from each bureau once every 12 months.
As for you credit score, you can often get this free of charge from your bank or credit union, your credit card company, or from a number of sources online. You can also get it when you request your credit reports, but there's a small fee involved if you do.
Once you have your credit reports and score, you can go over the information and see exactly what lenders are looking at when they check your credit.
Though there are many ways to improve your credit, here are three simple options:
- Start paying on time, every time – One of the simplest changes you can make in your habits is to begin paying all of your bills on time. Once you get into a rhythm of making timely payments, make sure you catch up on any past due bills. If you find you routinely have trouble with one or two bills, try contacting the creditors to see if you can change your payment dates to something more workable. There's no guarantee your creditors can do this, but there's no harm in asking. When in doubt, always talk to the lender or creditor – you may be surprised by how they can keep you from falling behind.
- Stop overspending – Credit cards are great as a backup when you need them, but if you consistently max them out and only make the minimum payments, they may be doing more harm to your credit than good. To help improve your credit score, make sure you're using no more than 30% of your available credit. To see the percentage of your total credit you're using, simply total up your credit card balances, and divide that by the total of your credit card limits. If you find your credit utilization is more than the 30% limit, you should work to pay down your credit card balances – but don't close the accounts. Going forward, try to charge only what you can afford in cash, and pay your credit card balances in full each month.
- Clean up your credit reports – When you're looking over your credit reports, it's important to note if anything is wrong, or shouldn't be there. Having negative accounts that should have dropped off your credit reports removed by the reporting bureau can have a positive impact on your credit score. To do this, you typically have to contact the reporting bureau and file a formal dispute in writing in order to have them review your claim and remove the offending account. This can take a lot of time and work on your end, but it can be effective if you notice a lot of mistakes on your reports. On the other hand, some bureaus allow you to do this online, which is a much quicker process.
Using a Commercial Credit Repair Company
If you notice there are errors on your credit reports, but you don't have the time to sit down and write to the credit bureaus, you have the option to hire a commercial credit repair company. These companies do the work for you, and you hopefully get to reap the rewards of a better credit score.
Commercial credit repair companies can be a great option if you don't have time to fight with the credit bureaus. They write the letters, and act on your behalf waiting for credit bureaus to reply – all you have to do is pay for the service.
Get a Car and Repair Your Credit
One of the great perks of working with the right type of lender when you need a vehicle is that, if you have bad credit, you can get a car and repair your credit at the same time! When you go through a special finance dealer, you work with a subprime lender that looks beyond your credit scores to get you approved based on other factors such as income, employment history, and residence stability.
When you use a subprime lender that can get you an auto loan with bad credit, you can improve your credit with each timely loan payment. Since a car loan is a major purchase as well as an installment loan, it's a great opportunity to get serious about making your payments on time.
If getting the auto loan you need and repairing your credit at the same time sounds good to you, you've come to the right place. At The Car Connection, we specialize in connecting bad credit car buyers to dealerships with the right type of lenders. The process is quick, free, and easy – just fill out our auto loan request form today, and we'll get to work finding you a dealer in your area!