How A Used Car Can Improve Your Credit Score
By Mike Bill
For many people suffering from bad credit, major purchases like a house or vehicle can be almost impossible to make. Whether it is a result of bad purchasing habits, unexpected job loss or a divorce, credit card debt can cause a burden in your life in more ways than one. So if you have been turned down for a loan because of bad credit but still need a loan to make a major purchase, it helps if you are able to prove to lenders you are reliable when it comes to making your payments on time. One way to do this is by purchasing a used vehicle from an on the spot financing dealer who reports your on-time payments to credit bureaus to help you build your credit.
When it comes to major purchases like a home or new vehicle, lenders want to see that you are a strong candidate to fully pay back the loan they are lending. If you have had credit issues in the past, these lenders may be concerned you will not follow through on your end of the deal and they will be less likely to give you the loan you need. As a result, you will want to do everything you can to improve your credit before you apply for the loan.
One method of improving your credit is by showing the bank or other lending service that you can, in fact, make regular payments consistently and on-time. A great way to do this is by purchasing a vehicle through an on the spot (or buy here, pay here) financing dealer.
For starters, some on the spot financing dealers will report your consistent, on-time payments to credit bureaus, which helps show that you are a trustworthy candidate for a loan, even if you have had credit issues in the past. Unfortunately, not all buy here, pay here dealers follow through on reporting your payments, so be sure to do your research before choosing a dealer and be sure that company does, in fact, report your on-time payments.
Another way a used car can improve your credit score is by helping you get into the habit of paying your bills on time every pay period. For many, consistently making payments on old loans can be a challenge. However, with on the spot financing, car buyers are motivated to keep their vehicles and make their payments regularly. Getting into this habit can be helpful for getting your other loans paid on time and getting your debt paid off.
Overall, purchasing a used vehicle through an on the spot financing dealer can be one way to help improve your credit, especially if you've been turned down for a loan in the past because of bad credit. If you choose a dealer who reports your payments to credit bureaus and you get into a habit of paying your bills consistently and on-time, you can improve your credit and eventually use your improved credit to make a bigger purchase such as a home or new vehicle.
CarHop has store locations in twelve states across the U.S. and specializes in helping car buyers with poor or no credit get approved for financing to get them driving again fast. Every CarHop vehicle includes an 18-month, 18,000 mile limited warranty at no extra charge. CarHop is now in its 15th year of pursuing its mission of "Helping People Driveďż˝." For more information, please visit http://www.carhop.com.