Credit impacts many areas of your life, especially when it comes to large purchases like a house or a car. Due to the high cost of these big-ticket items, most people need a loan in order to get them. This is where credit comes in. The better your credit score, the better your chance of getting a good deal on financing. Here's how to clean up your credit reports to improve your credit score so you can get a better loan.
Better Car Loans with Better Credit
When you have bad credit and need an auto loan, you still have a good chance to get a loan because of a group of lenders known as subprime lenders. These lenders work through special finance dealerships to get credit-challenged consumers into vehicles.
Just because you can get a car loan with poor credit, however, doesn't mean you shouldn't strive to have the best credit possible. There are several ways you can easily improve your credit score, and one of them is to clean up your credit reports.
In order to know what can be cleaned from your credit reports, you first have to know what's on them. The most efficient way to keep up with this is to monitor your credit reports throughout the year.
You can do this for free by visiting www.annualcreditreport.com to receive a copy of your credit reports. You're entitled to one free copy every 12 months from each of TransUnion, Equifax, and Experian, the three national credit bureaus.
How to Review Your Credit Reports
Do you know what's supposed to be on your credit reports? Even though credit is something that impacts most people, not everyone is sure how it works. Your credit reports are a snapshot of your credit accounts, showing how you've handled credit both currently and in the past. If you have a history of late or missing payments, a past bankruptcy, or a prior repossession, these may show up in your credit reports.
Don't worry, it's not only bad credit that shows up; your on-time payments and paid loans typically show up as well. Because credit reports are designed to give lenders an overall sense of how you handle things, both good and bad credit accounts stay on your reports for up to seven or 10 years.
Once you get a copy of your reports, you should go over them carefully, checking for mistakes and accounts that shouldn't be there. Sometimes, an old account doesn't get removed after seven years, or a previously past due account which you've taken care of doesn't show up as paid. Other times, you may find fraudulent entries that you don't recognize, or simply mistakes where something is reported in error.
All of these items have the potential to negatively impact your credit score, and having them removed can improve your credit score.
Removing Items from Your Credit Reports
When you have items on your reports that you want removed, it's going to take some work on your end. According to legal website Nolo.com, credit bureaus have 30 to 45 days to respond to an inquiry into an item on your credit report.
Once you dispute an item, the credit reporting agency must investigate, and either delete it or inform you that the information is accurate. If you dispute information but it isn't fixed, you may need to take further action when you know that it's inaccurate.
If it's an account in collections, you may have to call both the collection agency and the original creditor in order to have the account removed. Be prepared to show compelling proof as to why you believe the item in question is wrong.
Another action you can take is a letter writing campaign to the creditor. When you officially write and ask for a certain entry to be removed from your credit reports, the creditor may agree that the item is wrong and send you a letter saying so. You can then send a copy of that letter to the credit reporting agency so they can correct the error.
All of these steps can be effective, but they're also time consuming. Though you can do all of these things yourself for free, there's also a way you can have someone else handle the work for you.
Improving Your Credit Score with a Credit Repair Service
If you notice that things need to change on your credit reports, but aren't sure you have the time or patience for the calls and letters that have to be done, you can enlist the help of a credit repair service.
Our trusted credit repair consultation partner can help you take charge of your situation. This service can take the stress and hassle out of contacting your creditors by helping you with the legwork.
Build Your Credit with an Auto Loan
Another way to help repair your credit is through an auto loan. If you qualify for a bad credit car loan, and consistently make on-time payments on it, you can build your credit score up. Then, you put yourself in a better position to qualify for better loan terms the next time around.
At Auto Credit Express, we want to help you find the right dealer for your next auto loan. We work with a national network of special finance dealerships that can help borrowers with less than perfect credit. Get connected to one near you by filling out our free and easy car loan request form now.