You
require a good credit score to secure an auto loan. But how would you
display a credit history of responsible payments if no one lends you
money in the first place? Simple answer; you can build a good credit
score for yourself even if you are young or just starting out. In order
to secure your auto loan and buy your next dream car, you will have to
consider some key factors.
Start Right: Increase Your Chances of Building a Stellar Credit Score
The following key pointers will help you in setting your mind towards the task of building a good credit score:
1. Find a Co-Signer
A
great way to build goodwill in the eyes of the lenders is when you have
someone to back you up with a good credit history. A lender will be
more likely to approve your application if you have a co-signer who can
make payments on your behalf, should you miss any. Make sure you arrange
a meeting between the dealer and your co-signer in order to obtain a
clear picture regarding your auto loan deal. Additionally, you may ask
for a better interest rate as you have the benefit of a co-signer. Thus,
a co-signer will help you to secure an auto loan, give you a scope to
negotiate lower interest rates and guide you through the formalities.
2. Apply for a Credit-Builder Loan
A credit-builder loan is, typically, a loan for those who have poor
credit score or zero credit history. It helps them to build a good
credit score. Think of it as training wheels before you actually apply
for an auto loan. The loan amount is secured in a savings account, which
the bank/credit union will release to you once you have made all the
payments on time. Say, you borrow $5,000 and have spread the payments
over a time period of one year; then your monthly payments sum up to
$417. At the end of the year, you will get the loan amount. You can
establish a good credit score through a credit-builder loan, provided
you earn enough income and pay your dues on time. Once your credit goes
up, you can apply for the auto loan easily.
Good Financial Habits, Good Credit Score, Good Interest Rates
A
good credit score will stay good as long as you follow the rules and
ingrain good habits. Do not let any bills go unpaid, be it your auto
loan payment or your credit card bill. Timely payment will surely help
you to create the foundation for a good credit score. Avoid opening
multiple bank accounts and make sure that you keep your accounts
functioning for as long as possible. Also, always keep a check on your
credit reports for any discrepancies or errors that may have gone
unnoticed. Good habits will help you build good credit, which in turn
will help you in securing an auto loan that provides good interest
rates.
Whether
you are a college student or a recent graduate, we help zero credit car
buyers. Work with the auto loan expert to obtain guaranteed auto financing options. We have customized no credit no co-signer auto loans to help you buy a car without co-signer.
