If you’ve been turned down for used car financing, your credit score is a likely culprit. Because Scott Lot believes everyone should have access to great cars and financing, we offer financing tools and advice you can rely on. These tips for raising your credit score may help if you’re trying to secure a used car loan.
Bring Down Credit Usage
A good rule of thumb is to keep your credit usage below 30% of your credit limit. Using more of your credit can cause your credit score to go down, so paying down some of the principal is an excellent way to boost your score. The higher your credit score, the more you’ll be able to borrow while paying a lower annual percentage rate (APR), so reducing your ratio is helpful.
Pay Your Bills Regularly
In addition to looking at current usage, your credit score analyzes how you have paid and are currently paying your bills. Remember that your mortgage and credit card companies aren’t the only ones that report to credit bureaus; a late phone or utility bill can damage your credit, too. Keep payments on time to prove you’re a dependable borrower.
Raise Your Credit Limit, But Don’t Apply for New Credit
Because your credit utilization is such a significant part of your credit score, you may be able to raise your score slightly by asking for a higher credit limit so your debt is lower relative to available credit. However, there’s a catch: you should not do this if it involves a credit check. If it counts as an application or a new line of credit, the temporary score drop will hurt your approval chances for a car loan.
Begin the Vehicle Financing Process in Allentown, PA
No matter what your vehicle financing needs are, from loans to trading in, it’s helpful when you have a professional to guide you. Scott Lot is here to help. Learn more about how you can raise your credit score for easy financing with support from our team today.