LONDON – Are you frustrated because you are unable to buy a new car because of bad credit? Remember there is always hope at the end of the tunnel so first, you should check whether your credit is that bad.
It may be a bit hard for you to believe but there is a possibility that there is a mistake in your credit score. Yes, this is not a far-fetched idea. If there are mistakes, then they can be corrected, and you stand a better chance of getting a car loan fast.
Knowing The Facts
It is important for you to know that your auto loan will affect two things. These two things are your credit score and your credit report also.
The credit reports are quite detailed and are produced by three credit bureaus. These include Equifax, Experian, and the TransUnion. The credit reports include all the details of your settlements.
Your credit score indicates your borrower reliability. When you want to find out how your auto loans affect your credit report, then you do not need to go through every page in detail.
When you open the report, then you should focus on two categories.
The type of account
The auto loans are mentioned as an installment account. The interesting part is that if you get a car loan, then it may help your credit profile in case you do not have an installment loan.
If you make your payments on time, then your car loan will be mentioned as current. Payment history has a major influence on your credit report. If your car loan shows as current on the payments, then this can positively influence your credit score.
However, if the car payments are not made on time, then there is a possibility that your credit score can get ruined. There are times when an on-time payment also shows as late. In this case, you should think along the lines of filing a dispute.
When you ask the lenders for the quotes, then multiple lenders run credit checks. In the end, many queries may get listed on your credit report, but you do not have to worry at all.
If you want to shop for an auto loan within the 30 day period, then all the inquiries will be counted as one in your report when your FICO score gets calculated.
The best approach is that you should try to keep your search brief. This way you will not have to fear that your score will get hit.
When you have a clear understanding about how auto loans for bad credit show up in your report and score, then there are chances that you can devise a better plan to get a loan.
If you want to avoid stress, then the perfect strategy is to discuss the terms of loan clearly with your lender. This way you can avoid trouble coming your way and return the money you borrowed on time.