How Auto Finance Direct Can Help You Build Your Credit Score
Let’s be honest, it would be great to have the perfect credit score, but an AAA score is essentially unattainable. While that may be the gold standard, for most it’s just a pipedream. Building your credit score doesn’t happen by idly waiting around. Whether you’re looking to build your credit score, or you have other things in mind- Auto Finance Direct can help.
There is a plethora of reasons you may find yourself in need of a loan. You may be looking for car finance, you may be in need of a helping hand to make a dream purchase, or perhaps you’re looking to build credit score.
Auto Finance Direct is an Automotive & Personal Finance Provider servicing New Zealand. Our team is made up of smart and friendly individuals with combined decades of experience who are dedicated to helping you.
No one can see into the future, so it’s impossible to prepare for absolutely everything. When you want your dream car, or hit a financial road block you may not be able to turn to family and friends for a helping hand. That’s where Auto Finance Direct comes in. We are here to help you buy your auto purchase. Additionally, we are incredibly flexible and understanding. If you hit a road bump in your repayments, we can talk about how best to proceed to make life easier for you.
We can assist you with the process of helping build credit score, and getting your finances back on track. How can we help you build your credit score? Actually, there are a few ways you can do this.
1. Consolidate Your Debt
This is an efficient way to build your credit, as unloading your debt improves your score. Don’t worry about getting a new credit card and transferring the new one. Instead, get a loan to pay off your credit card debts, which leaves you with just one debtor. When you have multiple creditors with various balances, it has an impact on your credit score. You can focus on repaying the loan, lowering your debt over time, and constantly improving your score.
This works as a method to building your credit score because your score takes all these various balances into consideration. You’re polluting your credit with all these balances. Once you’ve rolled your debt into the loan, you may want to consider cancelling all of the credit cards.
2. Bulk Your File
If you’re looking to build your credit score because you have little (or no) history, then you’re in a good position. A loan is a great way to allow you to make some large (and wise) purchases, and then build your credit score as you make your regular payments on time. You could use your loan to invest in a new car or another big item that could improve your life.
Personal loans, and auto loans are an excellent way to improve and build your credit score.
3. Clean Your Credit Report
Around 80% of credit reports have inaccuracies or errors on them. Those errors could be impacting your score. So, make sure that you check your report for inaccuracies or errors. Once you have any mistakes wipes from the report you’ll see your score improve within a month.
Now, while cleaning up your report to ensure there are no mistakes some people make a mistake of their own.
A lot of people believe old debt is bad news on a credit report. You pay off your car, or your house, and then you want it removed from your credit history. That’s inaccurate, and just plain wrong.
Obviously, negative items will be bad for your credit score, though the majority of those fall off your report after 5 years. However, good debt that you paid on time and handled well is great for your credit! A long history of good debt is a good thing. So, leave old, good debts on your account for as long as you can. It shows that you have a solid record of repayment.
You wouldn’t want to get perfect scores throughout your education or work and then have that expunged from your record down the line!
4. Automatic Payments
Even just one late payment can have an impact on your credit score. The best way to ensure you pay your debts on time is by being proactive.
You can set up an automatic payment plan so you never miss a payment, or create a calendar reminder to give you notice that your payment is due. If you opt for the latter, you may want to set it for a few alerts so that you’ll be reminded multiple times. Try to set the alert for a time that you will see it and be able to take action, rather than being reminded at work and forgetting by the time you get home.
If you’re interested in car finance, then we can help you there, too. Making a big purchase is difficult, especially during times where you have a lot of outgoings and expenses. So, it’s important to us that we can help people make important purchases, like cars. If you’ve had your eye on the perfect car, but you’re coming up short then it’s time to give us a call to discuss our car finance calculator. We can assist you and calculate car payment, as well as arranging a reasonable repayment plan. No matter what your loan needs are, Auto Finance Direct can help.
Remember, when you apply for credit it creates a small dip in your score. This dip sticks around for a year. If someone has made multiple credit applications, then it’s because they want more credit. There are formulas, however, with auto loans, student loans, and mortgage loans, that factor in making multiple applications while only taking one loan.
If you want to learn more about how we work, or talk about what type of loan would be best for you, then get in touch.
Contribution by guest writer Neil Clough, an experienced auto finance executive.