Many do not realize it, but the simple act of buying a used car is a positive and productive measure for building credit. It does not matter if you are just starting to build credit or you are working on making improvements to your credit; financing a used vehicle will help you achieve success in your endeavor. This is especially true if you elect to purchase your vehicle through Carfect.
This used car dealer has offered in-house financing on used vehicles since the year 1990. If you are in the market for a used car dealer that specializes in providing financing services to those with credit issues – such as no credit, very little credit, or credit blemishes – Carfect should be your top choice!
Not only will you obtain the vehicle of your dreams at the fraction of the cost, the dealership works to offer each applicant financing, and you will find that each payment you make improves your credit quickly and easily! In this comprehensive guide, you will learn how buying a used car helps credit app/”>build your credit.
Your Credit Score – Explained
In order to truly understand how buying a used car may positively impact your credit, it is first important to explain a few things about your credit score. This score consists of three numbers that is calculated based on the information pertaining to your credit history.
Numerous calculators on credit scoring are currently available; however, the most reliable and the one that controls the market – as a whole – is the FICO credit calculator. This particular credit score calculating system provides FICO scores that range from 300 to 850.
If your score is 540 or under, you may be denied the ability to obtain a loan for a vehicle. If the score is 740 or higher, you may be able to obtain the absolute best auto loan, in terms of the added interest rate. You should know, though, that the results you achieve will be based on that which is included in your score and the lender that you are working with to obtain financing.
In the case of Carfect, you are likely to receive financing despite your FICO score and what is obtained in your report simply because the dealership provides in-house financing and is willing to work with all consumers.
Credit Score Percentages
Your credit score is based on your credit history, your payment history, the life of your accounts, account usage, and new credit lines which you have obtained. The following outlines the specific percentages, as outlined by Consumer Affairs, when it comes to what is most heavily considered to what is least considered:
- The History of Your Payments Accounts for 35%
- The Amounts That You Owe Accounts for 30%
- The Length of Time You Have Had Credit Accounts for 15%
- The Specific Credit Mix You Have Accounts for 10%
- New Credit Lines Opened Accounts for 10%
- Most Lenders Will Not Provide Money to Questionable Borrowers
If you have no credit, very little credit, or bad credit, most lenders will not provide you with money to finance a used vehicle because they consider you to be a questionable borrower. If they elect to provide you with a loan, you may find that it includes outrageous interest rates. The lender simply wants to have the confidence that the money will be paid on time and 100% in full.
In addition to reviewing your credit, lenders with strict lending guidelines will most often review your income, your work history, and the amount of time you have been on a job. Not only is it hard to obtain financing for a used car loan with bad credit, but it is also a challenging and emotionally complicated experience; however, Carfect strives to ensure that you get the financing you need when you need it most.
Once “Carfect Approves Financing, How Will It Help My Credit?
Once Carfect approves you for your used car loan, your credit will immediately benefit. The financing that you will receive will prove to be an excellent tool for establishing that you are worthy of being allotted credit. It also informs those who inquire into your credit that you have the capability of paying back a large debt; after all, a car is considered to be one of the most expensive purchases made in life.
Used car loans are considered to be installment loans. When companies research your credit, they search for revolving credit lines and installment loans. The mixture may prove to be highly productive in establishing your “credibility” – so to speak. A car loan is one of the most affordable and flexible installment loans that may be obtained. By getting approval from Carfect today for your next used vehicle, you are paving the road to a better credit score for many tomorrow!