How to Build Your Credit Score with a Bad Credit Car Loan
- September 1, 2023
- Bad Credit
- Posted by Hannah
- Comments Off on How to Build Your Credit Score with a Bad Credit Car Loan
There are few things less stressful than having bad credit, especially when you’ve found yourself in a situation where you need to take out a car loan. Thankfully, if you do need to take out a car loan — but happen to have bad credit — there are ways to do so that can actually help you improve your credit score over time. Yes, really! Let’s take a closer look at some of the steps you can take to build up your credit score by taking out a bad credit car loan below.
Make Timely Payments
Naturally, a critical part of building your credit score is making timely payments on all of your loans, not just your bad credit car loan. However, making on-time payments on your bad credit car loan is an excellent place to start. If you’re late on making payments, or end up missing payments altogether, this can have quite a negative impact on your credit score. For this reason, it’s crucial that you make sure you’re paying on time every single month. If you’re someone who has trouble remembering to make payments on time, it can’t hurt to set up automatic payments.
Pay More Than the Minimum
It’s always a good idea to pay more than the minimum amount on your bad credit car loan if you’re able to. This is generally a great way to build up your credit score more quickly. By paying more than the minimum amount, you’ll be able to reduce your overall debt faster, and in time, you should see your credit score go up. Doing this will also help you save a lot of money on interest charges in the long run.
Avoid Missed Payments
We all miss payments sometimes. It happens to the best of us. However, missing a payment on your bad credit car loan can not only lower your credit score but result in a late fee as well, so it’s best to avoid missing your payments if at all possible. If you know that you won’t be able to make a payment on time (or at all), you should contact your lender as soon as possible to talk about your options.
Monitor Your Credit Report
Errors happen, which can negatively impact your credit score if you don’t catch them fairly quickly. You should always check your credit report regularly, as this will help you ensure that there aren’t any errors or fraudulent activities affecting your score. You can very easily request a free copy of your credit report from any one of the three major credit bureaus. If you do happen to find any errors, you’ll want to make sure to report them to the credit bureau as soon as possible.
Car N’ Credit Bad Credit Car Loans
Getting a car loan with a bad credit score can be difficult, but it’s certainly not impossible. With careful management — such as paying on time, paying more than the minimum amount, avoiding missed payments, and keeping track of your credit report — you can work towards improving your credit score over time.
At Car N’ Credit, we firmly believe that your credit score does not define you, which is why we provide loans to people with all sorts of different credit backgrounds. Visit our dealership in Piqua, give us a call at (937) 773-0895, or start your car-buying process online today! We’ll be happy to help you get approved for a bad credit car loan in just a few minutes.