Purchasing a car with bad credit can be a nightmare. Bad credit can result in being denied time and time again. The good news is, there are ways to start improving your credit score quickly. By following a few simple steps, you can be on your way to a great credit score in no time.
Taking Your First Steps
As with any learning process, the first step consists of finding out what is needed to start improving. Checking where your credit score is can help you determine how far you have to go. Errors on your credit report could be costing you big time, but mistakes can happen more often than you may think. Below are a few of the most common issues to look for.
Identity Theft – If someone else has been abusing your social security number and information, it could lead to a significant drop in your credit score. Check to make sure that everything listed on your report is from your own credit usage.
Expired Accounts – Another common bad credit issue is negative accounts staying open longer than they should be. On average most types of remarks should fall off after 7 years. Be sure that all discrepancies have been removed on time.
Debts That Aren’t Yours – It happens more times than you think, a loan or debt that was assigned to your ex during your divorce or items that belong to an individual with a name very similar or even the same as yours could still end up dragging down your score. Having those items removed should help to improve your score.
Multiple Marks – It is also quite common for the same debt to be called in two or more times after being sold to a different creditor.
Plan To Improve Your Credit
After clearing out all mistakes on your report if your credit still isn’t where you’d like it, making a solid plan to follow is a great way to keep on improving. Understanding what factors are used to calculate your credit will help you create a good plan of attack.
Payment history accounts for 35% of your calculated score, which means if you have fallen behind on even a few accounts, it may result in a considerable drop in your score. Another 30% is attributed to open debts and their amounts. The last 35% of your score is made up of the age of your credit, credit usage, and availability, and also how many times your credit has been checked recently.
Avoid Unnecessary Hits
Sometimes you may be taking a hit to your credit without even knowing it. Like those seemingly harmless in-store credit card applications. It may take only a few minutes to sign up, but they can cause a small drop in your score. Also, paying off all credit card usage before it is even reported may seem like the responsible thing to do; however, that can keep your score from rising. It is recommended to keep your spending at less than 10% of your overall limit for the best results.
After making sure that everything else with your credit is in check, you can also try to get a secured credit card. However, don’t overuse it. A good tip is to set up one or two bills to be paid with the card a month and then pay it off on time. If you don’t have established credit yet, you can try getting a regular credit card to start gaining credit age.
If you are looking into purchasing a car with bad credit, we may be able to help. Find out if you’re approved here and let us help your new car dreams come true.