If you’re a driver in St. Louis, we want to help you with your credit rating. In some cases, an auto loan can be the perfect choice to help steadily improve your credit score by up to 200 points. On the other hand, if you do things wrong, taking out an auto loan can have a negative effect on your score. Here are some tips to help make the most out of your auto loan.
Don’t Let Multiple Lenders Run Credit Checks: It might be tempting to shop for rates all around, and that’s a good idea, but don’t let multiple lenders run a credit check on you. Credit checks called “hard inquiries” can have a negative impact on your score if they’re outside of a 30-day period. If you do want to get preapproved rates from multiple lenders, make sure you do it all within the same month, or even better, within the same week, so your score doesn’t suffer.
Make Your Payments on Time: A car loan can be an excellent way to build your credit, but that comes with a catch. If you don’t make your payments on time, then it will be detrimental to your credit score. You might not see a swift 30-day improvement with this method, but it can make a significant difference to your long-term credit health.
Shorter Terms Are Better: The quicker you can pay off a loan without missing payments or making late payments, the better effect it will have on your credit. If you’re trying to rebuild bad credit, start with an inexpensive car and a short term loan. You’ll see your credit score go up quickly if you make those payments on time.
Let Green Light Auto Credit Help You Improve Your Credit Score