Trying to get a car on finance with bad credit can seem impossible. There are some companies that do offer some bad credit car finance and they are worth checking, but it could be worth taking the time to improve your credit rating. Here are four tips to help you improve your rating to improve your chance of getting a car loan.
Check Your Credit File
Don't apply for any finance at all before you check your credit file. Make sure that every element on your file is correct. If there are debts that don't belong to you or marks that companies have added incorrectly, you can apply to have them removed. You will need proof and contact the individual companies that have put the marks on your file.
Cancel Your Credit Cards
Any credit cards that you don't use need to be cancelled right now. This shows that you have available funds that you're not using, and it puts you at a higher risk of identity fraud. The same applies to any dormant bank accounts.
Get Your Credit Cards to 30% of the Total Allowance
Start paying off your credit cards one at a time. Get the debts to 30% of the total amount available on the card as quickly as possible. Once one is at 30%, you can move onto the next to get that to 30% before completely clearing them. This amount is realistic to reach and shows that you are responsible with your credit.
Once you've done that, clear the full balances right away. It's also worth reducing your available amount on the credit cards. Doing this will reduce the amount you can get in debt by, so you look like a more responsible lender.
Get in Touch With Creditors
Don't ignore your debts. When you have a bad rating, county court judgments and decrees will only make it worse. Avoid letting your creditors go to court for your unpaid bills. As soon as you realize you have them, get in touch and arrange a payment plan. Work with them and be open about your financial situation. They will work with you if you are honest and open, and it can prevent marks put on your credit file.
Improving your credit rating is the best option for getting bad credit car finance. It won't be easy or happen overnight, but it will help you reduce your interest rates and increase the chance of being approved for a loan.
My name is Jamieson and my family refers to me as a self-made millionaire. That isn't exactly true. I am very successful financially, but I didn't do it on my own. With parents who showed me the value of money, an exceptional economics teacher who taught me how to grow an investment from just twenty dollars and sound financial advice from people I trust, I managed to achieve my dreams and financial security. I meet many young people who simply don't have the know-how to turn their earnings into investments. I started this blog to share some of the advice I received over the years and highlight some of the best options I see out there in the marketplace. I hope it helps you to plan and start your own journey to financial success. Money doesn't grow on trees, but with the right advice, you can make it grow yourself.