How an Auto Loan Can Improve Your Credit Rating

Posted: Saturday, April 15th, 2017

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.

Woman in front of purchased car
  • 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

We’re happy to help buyers with all kinds of credit scores find the right auto loan at Green Light Auto Credit. We can help you get the financing you need to improve your credit score, because we work with with a nationwide network of lenders to ensure that you get the best deal. Contact Green Light Auto Credit online now or give us a call at (800) 200-5551 with any questions about our financing opportunities.

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