Credit Score Woes
Credit score has become everything nowadays if you want to purchase something on credit. Lenders are no longer playing and are not interested in taking your word or letting you slide with poor credit. After all, it is business and they have to protect their interests. So who is busy protecting yours? There are no shortcuts in the matter. You have to be in good standing as far as your credit report is concerned.
However, Credit score is not the only thing that is put into consideration when shopping for a car to buy. It does play a huge part, but they also look at other financial factors as well. They don’t only look at your credit score to buy a car.
You first have to be equipped with knowledge when you are out to go buy a car. You have to be familiar with your credit report so that the lender does not spring any surprises on you when he or she is doing their assessment on your credit score. It is also wise if you can, to fix your credit so that you have good credit score to buy a car.
Let us look at the obvious factors that will determine if you are eligible for a car loan.
The process of qualifying for a car
When out looking for a car, be prepared for your financial history to be scrutinized from left to right; from top to bottom. They are going to ask certain information from you and that may be your W-2’s, your employment history and your current job information. The reason for this is to figure out:-
- What sum of money (down payment) they are going to ask from you
- How high your interest rate is going to be
- The amount of money you shall be paying each month towards the loan. Keep in mind that you may get a car, yes, but it is all based on the amount of income you receive each month.
They also check your employment history to see how good you are at keeping a job and if you have a certain level of job security. This is all for the purpose of assurance that you will be able to make steady payments each month towards your car loan. It is also to make sure that you will, in the long run, afford to pay off the entire loan.
So what is a good Credit Score to buy a car?
Attaining good credit score to buy a car is not easy, but it can be done if you are determined to fix it.
The Fair Isaac Corporation abbreviated as FICO; average score is between 690 and 719. Now don’t lose heart; although it would be great to have these scores, having a below score than the indicated numbers does not automatically mean that you will not get the loan. But you have to be prepared to provide more proof that you are qualified to be granted a loan. Furthermore, this means that your interest rates will be quite high, if you should get the loan. That is why it helps to have a good credit score to buy a car.
How to avoid the tedious cycle of Car loans
It takes a lot of self discipline when you want to do away with paying for car notes. It may take a while to do it, but the end results are gratifying and you shall be financially liberated for good when it comes to car loans.
The following are steps in which you can eliminate the worry of having to get a good credit score to buy a car:-
- Pay your loan off as quickly as you can. Get a second job if you have to and have the income go towards the current loan. When you have that done, take the payment that you were paying for your car note each month and this time, open a savings account where you shall depositing each month as if you were making a payment.
- Keep making the deposits until you are ready to get another car. It is very satisfying having to pay for a car for cash, without having to sit there and wait for approval of credit!
- After buying the car without any strings attached, start the process all over again and if you do this, you will never have to worry about a credit score to buy a car ever again.
You still need to make sure that you have a good credit score to buy a car and other things that may come your way in the future that you want to buy. There are even employers out there who consider your application if you have good credit.