The pandemic has likely impacted you in multiple ways, and if you haven’t taken advantage of free copies of your credit reports yet, you could be missing out on an opportunity for credit repair!
Free Credit Reports Courtesy of COVID-19
If you haven’t reviewed your credit reports at all in the last 12 months, you’re missing out on a free advantage that could help you repair your credit.
Normally, you’re allowed one free copy of your credit reports every 12 months from each national credit bureau. But, near the beginning of the pandemic, the major credit bureaus – Experian, TransUnion, and Equifax – agreed to allow consumers one free copy of all three credit reports each week. This is a game-changer for those with poor credit or those looking to start their credit history.
The pandemic has created the need for borrowers to keep track of their credit since many people were left without work during the shutdowns. Many workers found themselves without pay and forced to get unemployment benefits, and possibly defer/hold off on their loans until they have a steady income again. With all this stress and chaos surrounding financial stability and credit, the credit bureaus opened up access.
To be a part of this, simply visit the government website www.annualcreditreport.com to request your reports. As you can see from the name of the site, you usually only have access to a free report annually: but not right now! The free weekly access to your credit reports ends in April of 2021, so if you want to see how you’re ranking, act fast.
Your credit reports generate your credit score – the three-digit number from 300 to 850. Your credit score is a major part of your buying power, and with a poor credit score, you may find it difficult to get approved for new credit such as an auto loan when you need it. It’s a good thing that credit can be repaired, though!
Building Credit Can Be Easier for a Limited Time
With the ability to review your actual credit reports for free once a week, you can practically watch your credit building and repair efforts in live time!
You can review your credit reports weekly for errors, keep up on active disputed accounts, and watch as your credit rises or falls based on your spending habits. If you missed a payment a month ago, you can request a copy of your credit reports and see how that payment was reported, and observe how much it really impacted your overall credit rating.
You can make notes of your spending habits and really watch how much your credit card balance(s) matter to your overall credit score. You can check on accounts in collections (if you have any), and even review how your student loans impact your overall credit rating.
It’s also a good idea to review your personal information. Identity theft can muck up your credit reports quickly, so it’s worth checking every once in a while to make sure your identity is safe and your information is being correctly reported by all three credit bureaus. If something is incorrect, you can dispute the inaccurate information and get it removed. Even if something is incorrectly reported, if it’s negative, it can harm your credit. It’s wise to review your credit reports as much as possible.
Repairing Your Credit by Taking On Credit
You may have heard the advice, “To build your credit history, you need to borrow money!” and this has some truth to it. But the reality that many borrowers face is that they struggle to just get their foot in the door when their credit score is in tatters.
With a lower credit score, getting approved for new credit isn’t always easy. As a result, it can be harder for you to simply “take on new credit” when your poor credit is what’s stopping you from improving it.
However, there are ways to build your credit even when it’s not great. Some quick tips include:
- Lowering your credit card balances below 30%, if you have revolving credit.
- Taking out a credit builder loan, which builds a savings and payment history.
- Becoming an authorized user on someone’s else credit card.
- Considering a secured credit card, which is backed by a deposit and is typically easier to qualify for.
- Sign up for free credit reporting services that add your existing bills to your credit reports, such as Experian Boost.
- Buying a car with a bad credit auto lender that reports your on-time payments and loan.
If you have negative accounts on your credit reports, remember that time heals as well. Most things fall off of your credit reports after seven years. With each year, negative marks have less impact on your credit score, too!
How Can I Get a Car Loan With Bad Credit?
Getting into an auto loan with a lower credit score can be tough if you’re applying with traditional lenders. However, subprime auto lenders are able to assist no credit borrowers, bad credit borrowers, and even borrowers with questionable credit histories.
Subprime lenders examine more than just your credit history to make their loan decisions. Instead of just taking your credit history and income into account, they look at your work history, debt to income, down payment amount, and maybe other factors.
These lenders can also tell the difference between situational and habitual bad credit. Situational bad credit is when outside influences took a toll on your credit reports – such as a medical emergency or sudden job loss. Habitual bad credit often happens when borrowers simply struggle to make on-time payments. If your credit score was damaged from a situation or just poor management, subprime lenders may be able to help you get the vehicle you need.
As a bonus, subprime car loans are reported to the major credit bureaus. If you are approved for financing and make your payments on time, you could be on your way to a better credit score! Payment history is the most important factor in your overall credit score.
Ready to Jumpstart Your Credit History With a Car?
At Auto Credit Express, we’re dedicated to connecting bad credit borrowers to dealerships that can assist in many unique credit circumstances. Instead of searching alone, complete our free auto loan request form and we’ll look for a dealer in your local area that’s signed up with subprime lenders. Get started on the path to your next car loan and credit repair today!